PiggyBank says LAB basis trade hit NAV, first unlock set for Aug. 14
The protocol said a roughly $100,000 OTC purchase of locked LAB tokens paired with a perpetual short hedge backfired as liquidity dried up and funding turned deeply negative.
PiggyBank said a LAB token basis trade initiated last month has hurt portfolio values after what it described as alleged market manipulation, reduced liquidity and deeply negative funding rates increased the cost of maintaining a hedge. The strategy involved a roughly $100,000 OTC (over-the-counter, off-exchange) purchase of locked LAB tokens alongside a perpetual short hedge (a derivatives position betting on lower prices without expiry). At current prices, the locked LAB position is worth $1.35 million, but PiggyBank said it will be excluded from net asset value until the first unlock on August 14. It said today's NAV is down about 15% for the USDC vault, 12% for SPYx and 9% for JitoSOL.
- OTC: Over-the-counter trading done off-exchange.
- perpetual short hedge: A no-expiry derivatives short used to offset price risk.
- NAV: Net asset value of a fund or vault.