News/Polyhedra Crypto Crash: ZKJ Token Plummets 83% in Liquidity Crisis

Polyhedra Crypto Crash: ZKJ Token Plummets 83% in Liquidity Crisis

2025-06-16 05:45:52

Polyhedra’s ZKJ Token Plummets 83% in Liquidity Crisis: A Deep Dive into the Collapse

A Sudden Crash Shakes the Crypto Market

 

In one of the most dramatic crashes of 2025, Polyhedra Network’s governance token, ZKJ, plummeted by 83% in less than 24 hours, wiping out nearly $500 million in market value. The token, which had been trading steadily around $2, nosedived to an all-time low of $0.3073 after a series of "abnormal on-chain transactions" triggered a liquidity crisis.

 

The collapse was exacerbated by coordinated sell-offs from large holders, a sudden liquidity drain in the ZKJ/KOGE trading pair, and an impending token unlock that spooked investors. The event has reignited debates about market manipulation, liquidity risks in decentralized finance (DeFi), and the vulnerabilities of incentive-driven trading programs like Binance’s Alpha Points.

 

The Domino Effect: How Liquidity Evaporated

 

The crisis began when major liquidity providers abruptly withdrew from the KOGE/USDT pool, forcing KOGE holders to swap into ZKJ via the remaining KOGE/ZKJ pool. This sudden influx overwhelmed the ZKJ/USDT pair, triggering a "liquidation cascade" that sent both tokens into freefall.

 

On-chain data reveals that three key wallets—linked to Binance Alpha Points farming—executed massive withdrawals:

  • One wallet dumped 60,000 KOGE (~$3.7M) and 273,000 ZKJ (~$530K).

  • Two others liquidated an additional $5 million in combined holdings.

The sell-off coincided with an upcoming unlock of 15.53 million ZKJ tokens (worth ~$10M at pre-crash prices), further destabilizing the market.

 

Binance’s Response: Alpha Points Rule Change

 

Binance, which had incentivized trading between ZKJ and KOGE through its Alpha Points program, announced an immediate policy shift: starting June 17, trades between Alpha tokens will no longer count toward point rewards. The exchange cited the need to "reduce systemic risks of concentration".

 

Community Backlash and Rug-Pull Accusations

 

The crash sparked outrage, with critics accusing the 48 Club DAO (KOGE’s issuer) of poor liquidity management. The team had previously stated that KOGE was "fully diluted from day one" and made "no promises" against selling—a comment that resurfaced amid the turmoil.

 

Polyhedra Network, meanwhile, assured users that its technology fundamentals remain strong and promised a post-mortem analysis. However, trust erosion is evident, with ZKJ struggling to recover beyond $0.33 as of June 16.

 

Market Impact and Future Outlook

 

The event highlights critical risks in DeFi liquidity models, particularly when tokens are interlinked through incentive programs. Analysts warn that ZKJ’s recovery hinges on:

  1. Transparency: A detailed post-mortem from Polyhedra.

  2. Structural Changes: Better isolation between ZKJ and KOGE markets.

  3. Investor Confidence: Avoiding further sell pressure from the June 19 token unlock.

Short-term price predictions suggest ZKJ could stabilize between $0.25–$0.40, but a return to $1+ would require significant trust rebuilding.

 

Share Your Thoughts

 

Was this a market failure, a coordinated dump, or a structural flaw in DeFi incentives? Share your views on our X.

Disclaimer: The information provided in this section is for reference only and does not represent any investment advice or the official views of FameEX.

 

Sources:

  • Cointelegraph: "Polyhedra’s Token Tanks 83% After Abnormal Trades"

  • Crypto Briefing: "Polyhedra Network’s ZKJ Token Crashes Over 80% After Liquidity Withdrawals"

  • FX Leaders: "Polyhedra Network’s ZKJ Token Crashes 83% Following Liquidity Crisis"

  • Crypto.news: "Polyhedra’s ZKJ Token Plunges 83% After Liquidity Crisis"

  • Binance Square: "Binance Adjusts Alpha Points Calculation Rules"

  • Invezz: "Crypto Price Predictions: Polyhedra Network (ZKJ)"

Other articles