The ZKJ token, associated with the Polyhedra Network, experienced a dramatic collapse on June 15, 2025, plunging over 80% in value in less than an hour. This sudden crash was triggered by a coordinated effort among several large wallets, which collectively withdrew more than $7 million in liquidity at 20:28 UTC. These wallets, many of which were actively farming Binance Alpha Points, simultaneously removed their liquidity from ZKJ and its related token KOGE, then quickly sold off their holdings. The abrupt withdrawal drained the liquidity pools, causing significant slippage and a rapid price drop from $1.90 to $0.32 within about thirty minutes. This cascade effect triggered forced liquidations totaling over $99 million in long positions, further accelerating the downward spiral.
On-chain analysis revealed that the event was not the result of organic market movement, but rather a highly orchestrated manipulation. ZKJ’s trading volume was found to be 68 times higher than other tokens with similar market capitalizations, and over 80% of this activity was suspected to be wash trading, where the same entity trades with itself to artificially inflate volume and manipulate price discovery. At least 150 suspicious wallets were identified as participants in this scheme, suggesting a high degree of coordination and intent to exploit the token’s market structure.
Compounding the situation was a scheduled unlock of 15.53 million ZKJ tokens, representing about 5.3% of the total supply and worth roughly $32 million. This influx of new tokens into circulation provided additional ammunition for the orchestrators to dump tokens into the rapidly thinning liquidity. The interconnectedness of ZKJ and KOGE, both of which were used in farming strategies and liquidity pools, meant that draining one pool had cascading effects on the other, amplifying the overall impact. As the KOGE/USDT pool was depleted, holders were forced to swap KOGE for ZKJ and then sell ZKJ, overwhelming the remaining liquidity and deepening the crash.
Much of this activity was driven by the pursuit of Binance Alpha Points, which reward users for trading volume on certain pairs. The event exposed a critical vulnerability in the Alpha Points program, as it incentivized manipulative trading behaviors like wash trading and rapid cycling of liquidity. In response to the debacle, Binance announced two days later that trading volume between Alpha token pairs would no longer count toward Alpha Points calculations. This move was intended to curb artificial volume, reduce systemic risk, and restore a measure of fairness to the incentive structure.
The ZKJ collapse is a stark example of how poorly designed incentive mechanisms, combined with coordinated on-chain manipulation and tokenomics vulnerabilities, can destabilize even seemingly robust tokens. It highlights the risks of relying on volume-based rewards, the dangers of wash trading, and the fragility of DeFi liquidity pools when faced with coordinated attacks. Binance’s rapid policy adjustment underscores the need for exchanges to remain vigilant and adaptable in the face of evolving market manipulation tactics. For investors and traders, the incident serves as a powerful reminder to scrutinize on-chain activity and be wary of tokens with unusually high trading volumes and complex incentive structures, especially around key events like token unlocks.
