LAB hit its first post-crash unlock on July 14, with the token trading near $0.40, down about 98.5% from its spot peak of $27.48 a little over a month earlier.
CoinAnk’s volume-weighted estimate put the average entry cost for positions opened over the last 60 days at about $3.33. Only 5.56% of that supply was still in profit. Early participants who bought in the presale at $0.025, however, were still sitting on paper gains of more than 10x even after the collapse.
LAB once reached a fully diluted valuation of $14 billion. From peak to breakdown, the move took only five weeks. Looking back across the full sequence, the structure behind the crash appears to have been visible well before the final unwind.
The founders’ second token cycle
LAB was positioned as a multichain trading terminal built around an AI trading narrative. It was co-founded by Vova Sadkov and Mark X.
Public reports said Sadkov had prior startup exits in EduTech and MedTech before entering crypto. In early 2024, he appeared frequently on industry podcasts as the founder of Eesee, speaking about how gamified trading could bring millions of users into Web3.
Eesee launched the ESE token on Blast in April 2024. RootData records show that by June 2024, just two months later, Sadkov had already started working on LAB, while also serving at one point as co-founder of Memes Lab. Reports said Eesee later stopped development, the team shifted to the new project, and ESE drifted lower, leaving investors behind.
On May 10 this year, Eesee angel investor Simon Dedic publicly called on people to sell LAB. He said the same founders had issued ESE a year earlier, that the price chart already told the story, and that investor interests had been damaged. In his view, dropping one project so quickly to start another round of value extraction was not the behavior of founders worth backing.
Dedic also said he had personally invested in Eesee as an angel and that investors there were hurt as well. He claimed vesting terms were changed right before the token generation event, and that temporary refunds were offered in a way that maximized the low-float, high-FDV structure. He went as far as calling LAB a giant scam in the making and said people should get out before being burned.
RootData now lists co-founder Mark X as having left. According to ZachXBT, he was also the person soliciting OTC buyers for LAB in a public Telegram group starting in January.
That history did not stop LAB from raising capital. RootData said that on Oct. 9, 2025, five days before TGE, LAB completed a $5 million financing round backed by 14 firms: Lemniscap, OKX Ventures, GSR, Animoca Brands, Amber Group, Cypher Capital, KuCoin Ventures, Gate Ventures, MEXC Ventures, Selini Capital, TVM Ventures, Presto, Re7 Capital, and RedBeard VC.
Among them, OKX Ventures, KuCoin Ventures, Gate Ventures, and MEXC Ventures were exchange-affiliated investment arms. Those exchanges later listed LAB for trading.
Supply build-up before the breakout
LAB launched on Oct. 14, 2025 as the 40th exclusive TGE on Binance Wallet, and Gate listed spot trading the same day. Bubblemaps said the earlier presale was limited to 313 participants and raised $1.43 million.
At first, LAB drew little attention. It fell to $0.074 in December and stayed below $1 for months afterward. During that period, the team kept promoting a buyback-and-deflation narrative. Lookonchain said the team bought back more than 20.9 million LAB worth about $2.35 million in October 2025 from Binance Alpha, Bitget, and PancakeSwap.
At the same time, inventory was quietly moving on-chain. ZachXBT said that from March to April 2026, several addresses deposited more than 226 million LAB to Bitget, split across five wallets holding 30 million to 60 million tokens each. The gas funding addresses tied to them were topped up together on April 23.
The mobile app announcement and the first vertical move
The turning point came in early May. On May 2, LAB said its mobile app was about to launch, a product it had promised on its TGE roadmap. On the day of the announcement, the token rose 161.7% to $1.80, touched $2.20 intraday, and saw 24-hour volume jump by more than 12x. Over the next five days, cumulative gains exceeded 500%, pushing FDV into the $6 billion range.
That catalyst alone did not convince the market. Coinglass data showed that LAB posted daily trading volume of $6 billion to $8 billion on May 3 and 4, while aggregate open interest across the market stood at only $100 million to $300 million over the same stretch. The ratio of turnover to open interest was above 25x, far above the 3x to 8x range usually seen in more normal token markets.
ZachXBT’s investigation did not stop the rally
On May 14, on-chain investigator ZachXBT published a long report estimating that insiders controlled more than 95% of LAB supply.
He said the project had not published a clear and complete vesting plan, and that circulating supply figures differed across third-party data platforms.
He also wrote that starting in January, co-founder Mark had been soliciting OTC buyers in a public Telegram group with discount bands ranging from 40% off to 80% off. One 80%-off tier for KOLs required recipients to repeatedly post in support of the project before unlocks.
A draft loan agreement involving BVI shell company The Lab Management Ltd. added another data point. The draft showed Sadkov signing as a director on a loan carrying 7.5% monthly interest, with a default clause requiring repayment in LAB at market price. The borrower wallet on that contract was the same address previously used for public buybacks.
ZachXBT also said participants in the public Legion sale had their lockups unilaterally extended from three months to nine months, with buyers learning of the change by email. Based on the TGE date, that nine-month term would expire in mid-July. Those buyers missed the entire May-June rally and were left unlocking into a post-crash market.
The market reaction was unusual. LAB slipped only about 10% after the report, then resumed climbing. By early June, spot briefly touched $27, while the aggregated contract price peaked around $19, roughly 4x above the level seen when the investigation was published.
A thin spot book and a derivatives-driven market
Why didn’t the report break the price? The answer appears tied to LAB’s market structure.
Coinglass data showed open interest holding in a $400 million to $700 million range during the May run-up, while spot trading depth did not support anything close to that scale. Pricing power sat largely in derivatives. Spot books were extremely thin.
From June 1 to June 3, open interest peaked near $820 million and then dropped to about $200 million to $400 million, yet the price stayed elevated. Much of the short side that could be squeezed had already been cleared out. Later in June, LAB pushed to new highs again even with noticeably lighter positioning.
Dedic issued another warning on May 31. At that point, LAB had doubled again in a week and FDV had reached $8.6 billion. He said liquidity on PancakeSwap was so thin that a $10,000 buy order could move the price by more than 70%.
He argued that suspicious market makers were painting the chart to lure in retail buyers and then pulling liquidity, and said an operation of that size would only be possible with help from centralized exchanges because sustaining the move would require zero-fee accounts. Otherwise, the cost would be too high.
He named Gate, KuCoin, and Bitget directly, accusing major platforms of enabling this kind of activity for short-term revenue at the expense of the industry they operate in.
PiggyBank’s hedge turned into a forced loss
Professional traders betting on a reversal were systematically squeezed. DeFi protocol PiggyBank said it bought $102,500 worth of locked LAB in early May through an OTC intermediary at around a 20% discount, then opened an equal-sized short in perpetual futures.
The trade was straightforward on paper. Long spot, short perps, mostly hedged on direction. The expected return came from the discount on the locked tokens plus funding on the derivatives leg.
The breakdown came from funding. Perpetual markets use funding payments to pull futures pricing back toward spot. When spot is kept persistently above the contract, shorts pay longs over and over.
PiggyBank said LAB spot was artificially held at elevated levels, driving funding as low as negative 17,000% annualized, or roughly negative 2% per hour. Under that structure, every hour the short stayed open meant more losses, and the hedge stopped making economic sense.
PiggyBank eventually closed the short near $9, realizing a $476,000 loss. That buy-to-close activity itself added more fuel to the move, and LAB later ran all the way to $27.
What had been framed as a relatively conservative arbitrage trade ended up transmitting losses across PiggyBank’s three product lines, including depositors in what were described as low-risk stablecoin vaults. The protocol later had to compensate affected users.
Nearly 90% down in 48 hours
On July 3, LAB plunged to around $5.7 and then snapped back violently. By July 6, it had recovered above $16, and open interest expanded again to $350 million. That proved to be the final push before the collapse.
From July 6 to July 8, LAB fell from about $17 to around $1.25 in 48 hours, a drop close to 90% that erased more than $5 billion in market value. Liquidations were concentrated in Binance’s perpetual market. Binance had listed only LAB perpetuals, not spot.
The project said the team had not sold and that selling pressure came from external large market participants and independent trading firms. It also announced a 1% token burn and said the roadmap was unchanged.
On-chain tracking later pointed elsewhere. From July 10 to July 11, an entity originally funded by the LAB team deposited 18.4 million LAB, worth about $18.3 million, to Aster and sold on-chain, sending the price down another 54% to $0.55. That same entity had received more than 196 million LAB from the team in April.
The selling continued and became harder to trace. On July 13, the same entity withdrew 17.9 million LAB worth about $7.2 million from Bitget, this time moved the tokens to KuCoin, and then transferred 5 million of them out within minutes. Those tokens were still sold through Aster spot, pushing the price down about 35% again, from $0.34 to $0.22. ZachXBT said the entity changed its on-chain fingerprint after his earlier disclosure in an apparent attempt to obscure the source of funds.
The burn pledge, however, was carried out according to the team. On July 14, LAB said it had completed buybacks totaling 22.683 million LAB, equal to about 7.27% of circulating supply, removing them from the open market. It also completed what it called the largest burn to date, reducing total supply from 1 billion to 990 million tokens. The price then rebounded to around $0.40.
The basic question: what is actually circulating?
At that point, a more fundamental issue came into focus. LAB still had not published a clear and complete vesting plan, and circulating supply figures continued to differ across third-party platforms.
Many media outlets had described July 14 as LAB’s first unlock, but the CoinLaunch page showed that monthly releases for investor allocations had already started in April.
CoinLaunch currently tracks vesting only for investor and airdrop allocations. Another 708 million LAB is marked as data unavailable.
On wallet attribution, RootData’s entity-labeled data showed only about 12 million LAB with identifiable ownership, less than 4% of circulating supply. Of that, Gate alone accounted for 11.8 million LAB. Major market maker Wintermute held just 7,084 LAB, worth roughly $2,000.
ZachXBT summed up the asymmetry this way: the team knew the unlock schedule, market makers knew their positions, OTC buyers knew their lockups, and retail could see only the price.
After the warnings failed, scrutiny turned to exchanges
The LAB collapse also exposed the limits of on-chain investigation. ZachXBT warned from May through July, but the warnings did not stop the process. KOL Jia Mi Wei Tuo criticized the pattern, saying that public attacks on manipulated tokens often end up drawing in more short sellers and handing manipulators more fuel for liquidations.
That argument found support in PiggyBank’s loss. Address clusters it had tagged in May later matched the July Aster selling flows with precision, making the eventual dump one of the clearest on-chain confirmations of the earlier research.
ZachXBT also argued that LAB was not an isolated case. He said the same playbook had already appeared across a string of tokens including RAVE, RIVER, SIREN, MYX, and SKYAI. The framework was similar each time: low float, coordinated wallet accumulation, deployment on BNB Chain, entry into derivatives markets through Binance Alpha, and then liquidation-driven extraction with leverage. What changed from case to case was the pacing.
Some structures first create a sideways range that looks like a local top, invite shorts in, and then use negative funding to blow them out, as in MYX. Others move almost straight from launch to peak when float is extremely thin, as in COAI. LAB followed the first pattern and wrapped it in an AI trading narrative. In that sense, the episode was presented not as a simple failed project but as a repeatable extraction model that had already been tested before.
The larger dispute now points at exchanges. Detecting manipulation at scale is difficult, and freezing assets without legal process is hard to justify, but the halo of Alpha listings, visibility from trending boards, and the path into perpetuals together created a sense of safety around the asset.
Much of retail anger has landed there. Beyond criticizing market makers, Dedic also blamed the platforms that allowed the process to continue. Some community users said exchanges would normally issue warnings and confiscate profits if project teams were found manipulating trading. In LAB’s case, the fact that the pattern lasted so long has led to questions about whether the platforms also benefited.
A broader sentiment has formed around that point. The market neutrality promoted by exchanges, critics say, turned into invisible extraction from retail once control of the float became obvious, and the idea of listing review now looks hollow in hindsight.