ZKJ Crash Analysis: A Wake-Up Call on Liquidity Risks in the Crypto Market

On June 15, 2025, at 20:30, the native token ZKJ of Polyhedra Network experienced a shocking scene. The price plummeted from $1.946 in a big dump, reaching a low of $0.3767 within two hours, a fall of up to 80.64%. At the same time, another popular token KOGE on the Binance Alpha platform also collapsed, crashing from $61 to $8.46.

The flash crash quickly triggered a chain reaction. According to Coinglass data, the total liquidation amount across the network that night reached 102 million USD, of which the ZKJ cryptocurrency alone contributed 94.36 million USD in liquidations, forming a typical bull trap.

Liquidity withdrawal, the fuse of the crash

On-chain data reveals the meticulous operations behind the big dump. According to blockchain analysis firm Lookonchain, six whale wallets sold 5.23 million ZKJ just before the crash, worth approximately 9.66 million dollars.

The operation process presents clear strategic steps:

• The key address (starting with 0x1A2) withdrew liquidity worth 3.76 million USD in KOGE and 532,000 USD in ZKJ within 5 minutes.
• Exchange 45,470 KOGE for ZKJ, and then sell 1.573 million ZKJ in batches.
• With a clear goal, choose to first attack the liquidity of KOGE, and then shift to ZKJ for double harvesting.

The interconnection of liquidity pools accelerates the death spiral. When the USDT in the KOGE/USDT pool is exhausted, liquidity providers are forced to exchange KOGE for ZKJ and sell, further intensifying the selling pressure on ZKJ. This design flaw makes the two tokens a community of fate.

“KOGE has been fully released from day one, with no lock-up. 48Club has never committed to not selling treasury positions,” the KOGE team stated when the price first showed volatility, which was later interpreted as a warning of a collapse.

Token Unlocking and Regulatory Adjustments, Adding Insult to Injury

The token release plan has become another straw that broke the market’s back. On June 15, Polyhedra Network released 15.53 million ZKJ tokens, accounting for 1.55% of the total supply. Even more severe, tokens worth approximately 32 million dollars, representing 5.3%, are scheduled to be unlocked on June 19. In an environment of liquidity exhaustion, newly added tokens directly translate into selling pressure.

The sudden change in the regulatory environment accelerated the outbreak of the crisis. On the day of the big dump, Binance announced an adjustment to the Alpha Points calculation rules:

• Starting from June 17th, 0:00 UTC, trading between Alpha tokens will no longer count towards points.
• The new regulations are aimed directly at trading pairs like ZKJ/KOGE that engage in wash trading.
• Stimulating some arbitrage funds to withdraw early has become the last straw that broke the liquidity.

“To maintain market fairness and stability, and to reduce concentrated systemic risks,” Binance explained the motivation behind the policy adjustments in the announcement. However, this statement unexpectedly became a catalyst for the big dump.

Binance Alpha Mechanism, a Time Bomb Under the Illusion of Prosperity

The rise of ZKJ and KOGE is closely related to the Binance Alpha ecosystem. As the two tokens with the highest trading volume on the BSC chain of Binance Alpha, their trading volume once accounted for 85.10% of the total trading volume.

The high liquidity is driven by the Alpha Points reward mechanism.

• Users earn points through trading to exchange for airdrop rewards.
• The ZKJ/KOGE trading pair has become the first choice for scoring due to its low wear rate.
• The TVL of the liquidity pools of both exceeded 30 million US dollars.

The points economy conceals the fragility of real value. With a surge in participants, the returns have plummeted sharply:

• At the beginning of June, 45 points were needed to receive airdrops, and on June 13, the new project ROAM’s threshold increased to 247 points.
• User order number revenue fell from 70-100 dollars to only 15 dollars.
• Directly caused the trading volume to be halved from the peak of 2 billion dollars on June 8 to less than 1 billion dollars.

When the income from points cannot cover the risks, shrewd large investors choose to withdraw their funds, leaving retail investors to bear the consequences of the collapse.

Aftermath of the Market: Crisis of Trust and Regulatory Alarm

The wealth evaporation caused by the flash crash is shocking. Taking an investment of 1000 dollars as an example, users who panic sold lost an average of about 800 dollars, far exceeding the earnings from 10 Binance Alpha airdrops. Some users with a principal of 5000 dollars were left with less than 500 dollars after the flash crash. Even more brutal, six traders were each liquidated for more than 1 million dollars.

The crisis management of Polyhedra Network failed to quell the public anger. The team stated on platform X that “the technology and community fundamentals remain robust,” attributing the big dump to “abnormal on-chain transactions.” However, the community is not buying it, and the label “rugged from both sides” quickly spread on social media.

Market technical indicators suggest a difficult recovery. As of June 16:

• The trading price of ZKJ fluctuates between $0.33 and $0.40.
• Daily trading volume fell by 61% to 1.23 billion dollars.
• compared to the historical high of $9.56 on March 2024, it has still fallen 96%.

Analysts warn of a potential “dead cat bounce” before continuing to decline. The road to recovery for ZKJ is fraught with thorns. The aftershocks of this flash crash are still spreading. On June 19, the unlocking day for ZKJ tokens, the price of ZKJ is still hovering at a low of $0.40, down 96% from its historical high.
The crypto market is never short of the brilliance of technological innovation, but when Liquidity becomes a manipulable weapon, ordinary investors are always at the forefront of the storm.