On June 15, the price of Polyhedra’s native token, ZKJ, plunged dramatically by over 83% in hours, which sparked fears of a rug pull. However, the Interoperability platform has revealed an initial report, which reveals some possible causes behind the drastic decline in its price.
The new findings suggest a mix of coordinated attacks, liquidity attacks, and panic liquidations may be to blame.
ZKJ Liquidity Attack: The PancakeSwap Domino Effect
According to the report, the crisis began when several unidentified wallets executed a synchronized attack on PancakeSwap’s ZKJ/KOGE liquidity pool. These actors withdrew millions in liquidity before conducting aggressive sell-offs, with one address dumping 1.57 million ZKJ tokens in a single transaction.
The situation became worse due to KOGE’s extremely low USDT liquidity pool, forcing all sell pressure into the ZKJ/USDT pair and accelerating the price collapse.
Compounding the damage, crypto trading giant Wintermute deposited over 3.39 million tokens to centralized exchanges during the crash window. Their first deposit occurred when ZKJ was trading at $1.92, but by their final transfer, the price had pushed to $0.29.
While it does not directly indicate malicious activity, these perfectly-timed movements raised many questions.
The liquidity crisis triggered a devastating on-chain reaction on derivatives markets, where approximately $94 million in long positions were liquidated across exchanges like Bybit.
These forced sell orders created a downward spiral. With each liquidation wave pushing prices lower and triggering more liquidations.
I know everyone’s criticizing us right now, but we’ve faced this before. We turned criticism into praise last time, and we can do it again—even better than before. This is just a fresh start.
— Tiancheng Xie (@Tiancheng_Xie) June 16, 2025
Polyhedra team refuted the allegation of rug pull, saying, “Our team has provided ZKJ, BNB, USDT, and USDC to our DEX market makers to provide enough liquidity for Binance Alpha. Our team didn’t sell any ZKJ tokens. All of the tokens were used strictly for providing DEX liquidity and balancing the price between DEXs and CEXs, which is totally verifiable on-chain.”
To provide market stability, the DEX market makers have injected “approximately $30 million USD in liquidity by forming new pool positions to absorb the intense sell pressure on ZKJ across DEX platforms.”
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