On Sunday, the ZKJ token from Polyhedra faced a sharp price crash, declining by 83% within hours. The project's team analyzed the situation and identified several contributing factors.
Factors Behind the ZKJ Price Crash
The Polyhedra team listed five key reasons for the drop in ZKJ price from $1.92 to $0.32. These factors include: - Significant token deposits from a coordinated liquidity attack. - Substantial deposits by Wintermute into centralized exchanges. - Cascading liquidations on these exchanges. The project noted that multiple wallets coordinated an attack targeting the ZKJ/KOGE liquidity pool on PancakeSwap, followed by aggressive sell-offs of the ZKJ token.
Blame Directed at KOGE and Wintermute
Initially, Polyhedra attributed the price drop to "abnormal on-chain transactions" on the ZKJ/KOGE trading pair. Co-founder Tiancheng Xie stated that KOGE had "rugged all of us." KOGE serves as a governance token for the BNB48 Club within the Binance ecosystem. However, KOGE representatives quickly refuted the claims, asserting that none involved with the group had "dumped" the token and contributed to the price drop.
Consequences of the Price Drop
The price crash of the ZKJ token wiped out approximately $500 million in market value. At the time of publication, the token's price was already at $0.39, marking a significant decline from around $2 since December 2024. This drop has raised concerns among investors and market participants.
In conclusion, the sharp decline in ZKJ token price resulted from several interrelated factors, including liquidity attacks and internal sell-offs. The situation calls for careful analysis and further actions from the Polyhedra team to restore investor confidence.
