16.06.2025 10:19
The cryptocurrency market experienced a significant shock recently with the dramatic flash crash of ZKJ and KOGE tokens, both linked to Binance's Alpha Points program. This unexpected event highlighted the inherent dangers of concentrated liquidity and the potentially devastating impact of large-scale withdrawals by influential market players, often referred to as "whales."
Polyhedra, actively monitoring the situation, identified unusual on-chain activity as the catalyst for the crash. The sequence of events suggests a cascading effect, beginning with abnormal transactions affecting KOGE – possibly due to its contractual link with ZKJ – which then triggered a mass exodus of liquidity from both pools. This rapid depletion of liquidity fueled the price collapse.
Analysis of on-chain data by Lookonchain revealed substantial liquidity withdrawals from single wallets. One wallet alone withdrew an impressive $3.76 million worth of KOGE (61,130 tokens) and a further $532,000 in ZKJ (273,017 tokens), immediately preceding the market plunge. This resulted in a staggering 61% drop for KOGE, falling from $62 to $24, and an even steeper 85% decline for ZKJ, from nearly $2 to just $0.30.
On-chain analyst Ai Yi characterized this event as a potentially pre-meditated "harvesting operation," exploiting the high trading volume and liquidity associated with Binance Alpha. Yi's assessment points to a coordinated strategy involving multiple large addresses, simultaneously withdrawing liquidity and aggressively selling, creating a perfect storm that decimated the prices of both tokens. Furthermore, the timing of the crash coincides with a noticeable decline in Binance Alpha trading volume observed over several days, as evidenced by data from Dune Analytics. This decline is particularly striking when comparing the post-crash volume of approximately $770 million to the peak of around $2 billion on June 8th. The drop in trading volume following the flash crash underscores the profound impact of this event on Binance Alpha's activity.
