The price of Polyhedra Network's native token, ZKJ, experienced a significant crash on June 15, 2025, plummeting over 80% within a few hours. This drastic drop wiped out nearly $500 million in market value and sent shockwaves through the crypto community. Polyhedra Network has since released a preliminary report attributing the crash to a combination of factors, including coordinated liquidity attacks, substantial deposits made by Wintermute to centralized exchanges, and cascading liquidations.
According to Polyhedra's findings, the initial trigger appears to have been a coordinated on-chain liquidity attack targeting the ZKJ/KOGE trading pair on PancakeSwap. Several wallets allegedly executed a synchronized withdrawal of liquidity from this pool, followed by aggressive sell-offs of ZKJ tokens. On-chain data analyst @ai_9684xtpa identified three major wallets involved in the sell-off, which coincided with a token unlock that released an additional 15.53 million ZKJ tokens into circulation.
The report highlights that the ZKJ/KOGE trading pair had fragile and imbalanced liquidity. The selling pressure extended into ZKJ's primary USDT pool, exacerbating the price decline. The concentrated liquidity structure in PancakeSwap V3 also contributed to the issue, causing a significant loss of depth when the price moved out of range.
Adding to the turmoil, Wintermute, a leading market maker, made substantial deposits of ZKJ tokens to centralized exchanges during the crash. Polyhedra reported that a Wintermute address transferred 3.39 million ZKJ to CEX addresses within a short period as the price plummeted. These actions have raised questions, although Polyhedra's report does not directly accuse Wintermute of malicious activity.
The liquidity crisis also triggered liquidations in the derivatives market, where a substantial amount of long positions were liquidated across exchanges. These forced sell orders further intensified the downward pressure on ZKJ's price, creating a negative spiral. On-chain analytics platform Lookonchain reported that six whales sold 5.23 million Polyhedra tokens, which triggered the price drop. The whales first withdrew liquidity from the ZKJ and KOGE trading pairs, then swapped KOGE for ZKJ before engaging in mass selling.
In response to the crash, Polyhedra Network stated that the incident was triggered by a series of abnormal on-chain transactions on the ZKJ/KOGE trading pair within a short timeframe. The team emphasized that the fundamentals of Polyhedra remain strong and that they are actively reviewing the situation. To mitigate the decline, the Polyhedra Network team provided liquidity of around $30 million in stablecoins via DEX market makers on PancakeSwap. However, due to the falling prices, all these tokens were automatically converted to ZKJ, which was insufficient to alleviate the selling pressure.
The price of KOGE, a governance token for BNB48 Club in the Binance ecosystem that shares liquidity pools with ZKJ, was also affected. The token plunged from around $62 to $24 during the same timeframe. Binance has since changed its Alpha Points program rules to exclude trades between Alpha tokens starting June 17. Furthermore, a scheduled unlock of 15.5 million ZKJ tokens on June 19 could add more selling pressure to already stressed markets.
