ZKJ Token big dump: Cause analysis and investment insights

Recently, the price of ZKJ Token has experienced severe fluctuations, attracting widespread attention from the cryptocurrency market. As the governance Token of Polyhedra Network, ZKJ was once highly sought after on the Binance Alpha platform due to its high-yield liquidity pools. However, the flash crash event in mid-June 2025 caused many investors to incur losses. This article will delve into the reasons behind the big dump of ZKJ Token, explore the market mechanisms behind it, and provide investors with future coping strategies to help make more informed decisions in the cryptocurrency market.

1. Background of the big dump of ZKJ Token

ZKJ is the native Token of the Polyhedra Network, which is a blockchain infrastructure project focused on Web3 interoperability and zero-knowledge proof (ZKP) technology. The ZKJ Token is primarily used for decentralized governance, cross-chain bridge operations, and incentivizing network participants. In 2024, ZKJ and KOGE Token became popular choices for liquidity providers (LP) due to the high annual percentage yield (APY) of Binance Alpha. However, the market fluctuations from June 14 to 15, 2025, led to a ZKJ price fall of over 80% within 24 hours, with a sharp decline in trading volume and a shift in market sentiment to panic.
According to on-chain data and community analysis, the ZKJ flash crash event involved multiple factors, including liquidity crisis, large holder sell-offs, and improper operations by the project team. The following will analyze this event from multiple perspectives.

2. Analysis of the reasons for the big dump of ZKJ Token

1. Trigger of the liquidity crisis

The high-yield liquidity pools of ZKJ and KOGE have attracted a large influx of funds, but their trading pair design has structural flaws. The liquidity pool range for the ZKJ/KOGE trading pair is extremely narrow, making it difficult to withstand large sell-off pressure. Once the market experiences concentrated selling pressure, the liquidity pool cannot absorb the sell orders, leading to a rapid price collapse.

According to on-chain analysts, three major addresses have intensified the crisis through “large liquidity withdrawals + continuous selling.” For example, a certain address withdrew approximately $3.76 million in KOGE and $532,000 in ZKJ liquidity between 20:28 and 20:33 on June 15, and subsequently exchanged KOGE for ZKJ and concentrated selling, further crashing the price of ZKJ.

In addition, the insufficient depth of the KOGE/USDT pool forces LPs to exit only through ZKJ, creating a chain reaction of liquidation. This “overt scheme” of liquidity harvesting exposes the hidden risks behind high-yield pools.

2. The project party’s operations have caused a trust crisis

Community users pointed out that the KOGE project team creates the illusion of price support by continuously adding unilateral liquidity, but actually compresses the realizable space. Regarding ZKJ, some investors question whether the Polyhedra team may be selling tokens through multiple wallets. According to market trends, ZKJ was dumped 8 times within 24 hours, falling 84% in 8 hours. The team attempted to hide their manipulation traces, but on-chain data exposed the selling behavior of the main address.

In addition, on June 18, ZKJ is about to face a large Token unlock accounting for 1.55% of the circulation, which further intensifies market selling pressure expectations.

3. The liquidation effect of high-leverage contracts

ZKJ has a large position in the futures market, with some large holders establishing short positions on CEX in preparation for a price dump and hedging. When the spot price falls rapidly, the long positions in ZKJ futures face widespread liquidation, amplifying the downward movement and creating a vicious cycle.

3. The impact of the big dump of ZKJ token on the market

1. Investor confidence is undermined

The flash crash of ZKJ and KOGE has caused many investors participating in Alpha to suffer losses, especially those who chase high APY, known as “毛党”. Community sentiment has shifted from optimism to panic, with some users even jokingly referring to ZKJ as a “pig slaughtering plate”.

2. Increasing vigilance towards high-yield projects

This incident exposed the potential risks of high-yield liquidity pools, prompting investors to reassess the fundamentals and liquidity mechanisms of the projects. Tokens lacking actual value support struggle to withstand market fluctuations.

IV. Strategies for Investors

In light of the lessons brought by the big dump of ZKJ Token, investors should adopt the following strategies to avoid similar risks:

1. In-depth research on the project’s fundamentals
   Before participating in high-yield projects, carefully analyze the Token’s actual use cases, team background, and on-chain data. Although ZKJ relies on the zero-knowledge proof technology of Polyhedra Network, its Token value is more dependent on speculation rather than actual demand.

2. Beware of high APY liquidity pools
   High annual percentage yields often come with high risks. Investors should pay attention to the depth of the liquidity pool, the distribution of trading volume, and the LP exit path to avoid falling into liquidity traps.

3. Set Stop Loss and Diversify Investments
   In the cryptocurrency market, setting reasonable stop loss points and diversifying your portfolio can effectively reduce the impact of a single asset’s big dump. During the ZKJ flash crash, many investors suffered heavy losses due to overly concentrated positions.

4. Pay attention to on-chain data and community dynamics
   Use tools like Dune Analytics and Etherscan to monitor large transfers and liquidity changes, while also keeping an eye on community discussions on platform X to capture market trends in a timely manner.

5. Be cautious with token unlocking
   Large unlocks often come with selling pressure risks. ZKJ will unlock 1.55% of its tokens on June 18, and investors need to prepare risk management in advance.

V. Future Outlook: Can ZKJ Turn the Tide?

Although the price of ZKJ Token has suffered a heavy blow, Polyhedra Network still has certain technical potential as a Web3 interoperability infrastructure. The zkBridge implemented through the deVirgo protocol provides an efficient solution for cross-chain data interoperability.

However, the short-term outlook for ZKJ is not optimistic. The unlocking of tokens, a crisis of community trust, and a decline in market activity are all putting pressure on its price. In the long run, Polyhedra needs to reshape market confidence through the following ways:

• Enhancing transparency: publicly disclose team holdings and Token distribution plans to eliminate community concerns about “pig butchering” schemes.
• Optimize token economic model: reduce speculative drive and increase practical use cases of ZKJ in the ecosystem.
• Strengthen ecological construction: attract more DApp developers and expand the application scenarios of Polyhedra Network.

For investors, it is currently not advisable to blindly buy the dip on ZKJ. It is recommended to evaluate entry opportunities after the market stabilizes and the project team releases positive signals.

6. Conclusion

The big dump of ZKJ Token is a microcosm of the cryptocurrency market in 2025, reflecting the systemic risks hidden behind high returns. By analyzing the causes and impacts of this event, investors can learn lessons to avoid repeating the mistakes. In future investments, maintaining rationality, focusing on fundamental analysis, and flexibly responding to market changes will be key to success.