According to Foresight News , DeFi yield protocol PiggyBank tweeted that it invested $100,000 in LAB at a low price through an over-the-counter (OTC) transaction about a month ago, representing 2% of its portfolio at the time. After investing in LAB, the protocol established a short position using a Delta-neutral strategy, but due to extreme price manipulation and liquidity issues, the funding rate remained negative, resulting in continuous losses on the short position.
PiggyBank stated that the protocol is prepared to close out short positions to limit losses. Currently, PiggyBank has locked LAB positions worth approximately $1.35 million, but due to insufficient liquidity, the protocol plans to remove this value from net asset value, and users may see net asset value losses across various Vaults in the short term.
PiggyBank stated that it will release a detailed report next week outlining its subsequent solutions.
