Following the flash crash of the ZKJ token, which misplaced over 85% of its worth in simply at some point on June 15, 2025, Polyhedra Community has printed its preliminary evaluation report on the incident.
Based on the report, the collapse was attributable to coordinated on-chain liquidity assaults, Wintermute’s massive transfers of tokens to centralized exchanges (CEX), and the liquidation of leveraged positions within the course of.
It’s acknowledged that deliberate strikes in direction of liquidity swimming pools on PancakeSwap performed a significant position within the collapse of the ZKJ/KOGE pair. Based on the report, six completely different addresses withdrew a complete of thousands and thousands of {dollars} in liquidity after which carried out aggressive ZKJ gross sales:
- 0x1A29…599: Bought 1.57 million ZKJ, withdrawing roughly $4.3 million value of LP tokens.
- 0x0781…dE7: Transformed KOGE to ZKJ and offered 1 million ZKJ, making a $3.45 million transaction.
- 0x6aD3…EBb: He purchased 772 thousand ZKJ from the handle above and offered it in 8 minutes.
Different addresses offered a complete of 1.8 million ZKJ in the identical minute.
This assault directed promoting stress to the deeper liquid ZKJ/USDT pair reasonably than the low USDT liquid KOGE/USDT pair. The concentrated liquidity construction in PancakeSwap V3 additionally triggered a major lack of depth when the worth was out of vary, accelerating the worth decline.
Earlier than the crash, ZKJ/KOGE had turn out to be a well-liked pair for Binance Alpha farming campaigns. Nonetheless, after Binance modified its factors system in early June, the rewards for such trades decreased and liquidity help started to weaken.
In an try to cease the decline, the Polyhedra Community group supplied liquidity of round $30 million in stablecoins comparable to USDT, USDC, and BNB through DEX market makers on PancakeSwap. Nonetheless, because of the falling costs, all these tokens have been robotically transformed to ZKJ, which was inadequate to alleviate the promoting stress.
Particularly on exchanges like Bybit, leveraged positions that have been opened with the lower in spot costs have been liquidated one after one other. A complete of $94 million value of lengthy positions have been forcibly closed between 15:00 and 17:00. At the very least six main liquidation occasions exceeding $1 million every occurred round 15:57 UTC alone.
Wintermute, one of many main market makers, made outstanding strikes throughout the crash. The corporate’s handle transferred a complete of three.39 million ZKJ to central trade addresses between 15:45 and 17:14 on June 15. Throughout this era, the ZKJ value fell from $1.92 to $0.29. Wintermute’s pockets steadiness on Ethereum fell from 3.41 million ZKJ to 22,688 ZKJ.
Polyhedra Community introduced that these occasions are nonetheless within the preliminary analysis section, detailed evaluation of all actions on the chain is ongoing, and the report will probably be up to date within the coming days.
*This isn’t funding recommendation.
