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.
In line with the report, the collapse was brought on by coordinated on-chain liquidity assaults, Wintermute’s giant transfers of tokens to centralized exchanges (CEX), and the liquidation of leveraged positions within the course of.
It’s said that deliberate strikes in the direction of liquidity swimming pools on PancakeSwap performed a significant position within the collapse of the ZKJ/KOGE pair. In line with 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 bought 1 million ZKJ, making a $3.45 million transaction.
- 0x6aD3…EBb: He purchased 772 thousand ZKJ from the handle above and bought it in 8 minutes.
Different addresses bought a complete of 1.8 million ZKJ in the identical minute.
This assault directed promoting stress to the deeper liquid ZKJ/USDT pair fairly than the low USDT liquid KOGE/USDT pair. The concentrated liquidity construction in PancakeSwap V3 additionally triggered a big lack of depth when the value was out of vary, accelerating the value decline.
Earlier than the crash, ZKJ/KOGE had turn into 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 assist started to weaken.
In an try to cease the decline, the Polyhedra Community crew supplied liquidity of round $30 million in stablecoins similar to USDT, USDC, and BNB by way of DEX market makers on PancakeSwap. Nonetheless, because of the falling costs, all these tokens had been mechanically transformed to ZKJ, which was inadequate to alleviate the promoting stress.
Particularly on exchanges like Bybit, leveraged positions that had been opened with the lower in spot costs had been liquidated one after one other. A complete of $94 million value of lengthy positions had been forcibly closed between 15:00 and 17:00. No less than six main liquidation occasions exceeding $1 million every occurred round 15:57 UTC alone.
Wintermute, one of many main market makers, made exceptional strikes throughout the crash. The corporate’s handle transferred a complete of three.39 million ZKJ to central alternate 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 part, detailed evaluation of all actions on the chain is ongoing, and the report will likely be up to date within the coming days.
*This isn’t funding recommendation.
