Big loss shakes the hedging strategy in $LAB
ChainCatcher reports that the PiggyBank protocol suffered a loss of nearly 579,000 dollars on June 6 due to what was described as market manipulation of the LAB token.
The story in a nutshell:
Purchased 142,800 LAB tokens locked via OTC for 102,500 dollars while opening a hedging short position.
The continuous rise in the spot market price against perpetual contracts caused negative funding rates reaching -17,000% annually.
Closing the hedge resulted in an estimated loss of 476,000 dollars.
The token value in the market is around 1 million dollars, but it has been excluded from net assets due to poor liquidity.
There is an intention to gradually halt arbitrage strategies and enhance transparency, compensating users with USDC.
💡 The compensation is funded from the NAV gap and future sales after unlocking between August and October, plus 50% of the platform's revenues.
Do you think hedging strategies in illiquid markets have become riskier than before? Share your thoughts 👇
$USDC
$LAB
#LAB #CryptoNews #DeFi #Blockchain #trading #MarketManipulation #USDC
ChainCatcher reports that the PiggyBank protocol suffered a loss of nearly 579,000 dollars on June 6 due to what was described as market manipulation of the LAB token.
The story in a nutshell:
Purchased 142,800 LAB tokens locked via OTC for 102,500 dollars while opening a hedging short position.
The continuous rise in the spot market price against perpetual contracts caused negative funding rates reaching -17,000% annually.
Closing the hedge resulted in an estimated loss of 476,000 dollars.
The token value in the market is around 1 million dollars, but it has been excluded from net assets due to poor liquidity.
There is an intention to gradually halt arbitrage strategies and enhance transparency, compensating users with USDC.
💡 The compensation is funded from the NAV gap and future sales after unlocking between August and October, plus 50% of the platform's revenues.
Do you think hedging strategies in illiquid markets have become riskier than before? Share your thoughts 👇
$USDC
$LAB
#LAB #CryptoNews #DeFi #Blockchain #trading #MarketManipulation #USDC