PiggyBank's LAB Basis Trade Unwinds, Cutting Vault NAVs by Up to 15%

Solana yield protocol PiggyBank disclosed on June 6 that a basis trade it had been running on locked LAB tokens had failed, leaving its vaults with NAV drawdowns of up to 15%. The protocol has since closed the trade's short position; the underlying locked token position remains on its books until a scheduled August 14 unlock.

The Trade and How It Unravelled

Approximately one month before the disclosure, PiggyBank purchased around $100,000 of locked LAB tokens via an OTC desk, roughly 2% of portfolio value at the time. The protocol described this as a mid-cap basis trade: buy locked tokens at an OTC discount, then short LAB perpetual futures to hedge the price exposure and capture the spread.

The structure broke down in early June. LAB experienced sharp price swings on thin liquidity, and funding rates on the perpetual short turned deeply negative, making the hedge costly to hold. PiggyBank stated it closed the short before the position crossed its internal risk limits, but the exit still crystallised losses. The locked LAB tokens, now marked at approximately $1.35 million at current prices, cannot be sold until August 14 and have been excluded from vault NAV calculations until then.

The resulting NAV impact across the three vaults: the USDCUSDC vault fell approximately 15%, the SPYx vault fell approximately 12%, and the JitoSOL vault fell approximately 9%. PiggyBank announced the disclosures in an X post on June 6 and said a full postmortem report would follow the week after.

ZachXBT's Criticism

On-chain investigator ZachXBT posted the same day, writing: "this little piggy went to the market and lost user assets gambling on blatant scam coins." His June 6 post linked back to a May 14 investigation into LAB in which he alleged the token's insiders controlled more than 95% of supply. That earlier investigation documented alleged unilateral vesting extensions (the lock-up cliff extended from three months to nine months after the token launch), OTC loan arrangements with 60–80% token discounts, and large wallet movements into exchange accounts before significant price moves.

PiggyBank has not publicly responded to the characterisation. The protocol's own disclosure framed the position as a hedged basis trade, not a directional bet, and attributed the loss to market conditions rather than strategy design.

Position Now Closed, Locked Tokens Remain

The perpetual short that formed the hedge component of the trade is now closed. What remains is the locked LAB holding, which PiggyBank values at roughly $1.35 million but treats as illiquid for NAV purposes until the August 14 unlock. Whether the protocol will sell, hold further, or re-hedge at that date had not been announced as of publication.

The full postmortem PiggyBank committed to had not been published at time of writing.