PiggyBank saw a 15% drawdown in the USDC vault due to a failed hedge LAB.

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Wu Shuo learned that the yield agreement PiggyBank issued a statement saying that one month ago, they established a LAB-related position with $100k, using a strategy of buying LAB at a discount to lock in the position and hedging with perpetual futures short positions. PiggyBank stated that due to LAB's sharp fluctuations in a low-liquidity environment and a deeply negative funding rate, continuing to maintain the hedge is no longer economically rational, so they have closed the short position. Based on the current price, the locked LAB position is worth approximately $1.35 million, but due to insufficient liquidity, it will not be included in NAV before the first unlock on August 14. As a result, today’s USDC treasury NAV will decline by about 15%, SPYx by about 12%, and JitoSOL by about 9%. PiggyBank said they will release a detailed report next week.

On-chain investigator ZachXBT later criticized their use of user assets to participate in high-risk token trading, and in May, he had questioned issues such as opaque private placements/OTC loans for LAB, vesting period adjustments, market-making coordination, and highly concentrated supply.

LAB44.93%
USDC-0.01%
SPYX0.47%
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AirdropSidequest
· 6h ago
NAV drops 15% saying it's because lock-up periods are not included; this accounting treatment is a bit interesting.
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QuantsAndCats
· 6h ago
SPYx and JitoSOL are falling together; this pool is getting a bit unfair.
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AirdropTaxPanic
· 7h ago
ZachXBT warned in May, and looking back now, it’s almost like he was a prophet.
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PerpPessimist
· 7h ago
Hedging with low-liquidity tokens—when the funding rate turns negative, it collapses immediately. How did risk control get through?
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BearMarketWithAHintOfOrange
· 7h ago
Let's wait for next week's report; right now, the information is too fragmented to make a judgment.
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YieldKaraoke
· 7h ago
This move sounds like walking a tightrope—locking funds and hedging was one thing, but they still managed to mess it up; users’ money really is just experimental material.
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