Polyhedra Network's ZKJ Token Plummets 80% in Hours, Wiping Out Nearly $500M

Massive Liquidity Pulls and Sell-Offs Trigger Brutal Crash

Hold onto your hats, crypto fans! Polyhedra Network's token, ZKJ, took a nosedive of over 80% on June 15, crashing from a comfy $2 to a measly $0.26 in just a few hours. That's right, nearly half a billion dollars vanished into thin air!

According to a report dropped on X the next day, Polyhedra (ZKJ) pointed the finger at a bunch of wallets that yanked huge chunks of liquidity from the ZKJ/KOGE pool on PancakeSwap (CAKE) and then dumped millions of tokens faster than you can say "HODL." One wallet alone pulled a whopping $4.3 million in liquidity and dumped about 1.57 million ZKJ. Ouch!

But wait, there's more! At least five other wallets followed suit, all within minutes. This massive sell-off turned the market depth into a shallow puddle and sent the price tumbling like a rock in an already shaky liquidity structure. And because the KOGE/USDT pool was bone dry, the selling pressure spilled over into the more liquid ZKJ/USDT pool, making the crash even worse.

Meanwhile, crypto trading powerhouse Wintermute was busy sending over 3.39 million ZKJ to centralized exchanges like Bybit. Between 12:45 and 14:14 UTC, the price tanked from $1.92 to $0.29. At the start of this wild ride, Wintermute was sitting on over 3.4 million ZKJ. By the end, their wallet was left with just 22,688. Talk about a brutal haircut!

Over on Bybit, things got even crazier as leveraged long positions started unraveling like a cheap sweater. In just two hours, over $94 million in long positions got closed out, with multiple trades over $1 million getting liquidated around 12:57 UTC. These forced sales sent the price plummeting even faster.

And if that wasn't enough, recent changes to Binance's Alpha Points program added more fuel to the fire. Before the crash, traders were using the ZKJ/KOGE pair to farm Binance Alpha points like there was no tomorrow. But when Binance slashed the rewards for these trades earlier in June, the pool became as stable as a house of cards in a hurricane.

Polyhedra tried to throw a lifeline by injecting $30 million in liquidity during the crash to prop up the price. But most of it got sucked into ZKJ as the price kept falling. To make matters worse, the crash happened just days before a massive unlock of 15.53 million ZKJ tokens set for June 19. This added to the panic about more selling. With the top 10 wallets holding nearly 69% of the supply, whispers of more coordinated exits are getting louder.

ZKJ has clawed back a bit, now trading at $0.42, up 23% in the last 24 hours. Polyhedra's team is digging deeper and has promised to buy back tokens. But don't get too excited yet - analysts are warning that this bounce might be short-lived, with more volatility on the horizon as the token unlock looms.