ZKJ Token Plunges 60% in Flash Crash Amid Liquidity Crisis

On June 15, the ZKJ token, the native asset of Polyhedra Network, experienced a sudden and severe decline, dropping more than 60% from $1.98 to a record low of $0.7625 within less than two hours. This flash crash was particularly striking given ZKJ’s prior stability, as the token had traded within a narrow band of $2.05 and $1.98 for over 30 days, establishing itself as one of the less volatile tokens in the market.

The collapse was not only limited to ZKJ but also affected KOGE, another token that experienced a similar plunge. The synchronized crash of both tokens sparked widespread speculation, with some users pointing to a potentially “long-planned harvesting operation” as the cause. According to one prominent user, ETH APPLE, the issue began when the KOGE pool ran out of USDT, leaving liquidity providers (LPs) unable to exit positions. This led to a mass sell-off of KOGE into ZKJ, causing both tokens to crash. The situation worsened as it was revealed that the KOGE team hadn’t added any USDT to the pool, exacerbating the liquidity crisis.

The alleged draining of liquidity has fueled rug-pull accusations from the distressed community. Although ZKJ was reportedly “actively defending its USDT pool,” it ultimately found itself caught in the crossfire, its value dragged down by the unfolding chaos. The lack of communication from the development team has only served to exacerbate these concerns, as investors demand answers and assurances that their investments are not at risk.

The flash crash has highlighted the volatility and unpredictability of the cryptocurrency market. Despite the potential for high returns, investors must be prepared for the possibility of sudden and dramatic losses. The ZKJ Token's plunge is a cautionary tale for those considering investing in digital assets, underscoring the importance of thorough due diligence and risk management. As the market continues to evolve, it is crucial for investors to remain vigilant and informed, and for developers to prioritize transparency and accountability in their projects.