Polyhedra Network's ZKJ Token Plummets 83% Amid Abnormal Transactions

Polyhedra Network's ZKJ token experienced a dramatic 83% price drop, falling from $2 to 31 cents, following a series of "abnormal on-chain transactions" involving the ZKJ/KOGE trading pair. The sudden liquidity crunch triggered a significant collapse in the token's value, according to Binance. The incident occurred on Sunday, with the market cap of ZKJ plummeting nearly $500 million in a short span of time. Binance attributed the collapse to large holders removing tokens, which led to a "liquidation cascade in the market."

The ZKJ token initially fell 60% from $1.92 to $0.76 within a 90-minute window. It briefly recovered to $1.41 before experiencing another sharp decline to $0.32, where it has since stabilized. The token's price volatility was attributed to a series of abnormal transactions, which caused a significant loss in market value.

Polyhedra Network, an interoperability-focused crypto project that utilizes zero-knowledge proofs, acknowledged the situation and assured users that the network's fundamentals remain intact. The project is closely reviewing the incident and plans to provide more information as it becomes available. However, some observers have speculated that the price drop could be linked to a recent token unlock, though these claims have not been substantiated by major crypto analytics platforms.

Binance, which facilitated the trading of ZKJ and KOGE tokens to earn Alpha Points as part of its scoring system, announced changes to its Alpha Points calculation rules. Starting from June 17, the trading volume of trading pairs between Alpha tokens will no longer count towards Alpha Points calculation. This adjustment aims to ensure market fairness and stability and to reduce systemic risks of concentration.

The incident highlights the volatility and risks associated with cryptocurrency markets, where sudden and significant price movements can occur due to various factors, including abnormal trading activities and liquidity issues. The response from Polyhedra Network and Binance underscores the importance of transparency and regulatory measures in maintaining market stability and protecting investor interests.