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Altcoin Crashes 85%: Developers Cite Attack

16.06.2025 22:54

A dramatic 85% price plunge in the ZKJ altcoin on June 15, 2025, prompted Polyhedra Network to release a preliminary report detailing the events leading to the flash crash. The report attributes the collapse to a confluence of factors, including sophisticated on-chain liquidity attacks, significant token transfers by Wintermute to centralized exchanges, and the subsequent liquidation of leveraged positions.

Crucially, the report highlights the strategic exploitation of liquidity pools on PancakeSwap as a key element in the ZKJ/KOGE pair's downfall. Six distinct addresses orchestrated a coordinated assault, withdrawing millions of dollars in liquidity before aggressively dumping ZKJ tokens. For instance, one address (0x1A29…599) sold 1.57 million ZKJ, realizing approximately $4.3 million in LP tokens. Another (0x0781…dE7) converted KOGE to ZKJ and sold 1 million, netting $3.45 million. Further exacerbating the situation, other addresses simultaneously offloaded a combined 1.8 million ZKJ within a single minute. This targeted selling pressure focused on the deeper ZKJ/USDT pair, avoiding the shallower KOGE/USDT liquidity. PancakeSwap V3's concentrated liquidity structure amplified the impact, resulting in a severe loss of depth once the price moved outside its range, accelerating the price decline exponentially.


Prior to the crash, the ZKJ/KOGE pair enjoyed popularity due to its inclusion in Binance Alpha farming campaigns. However, a June alteration to Binance's points system diminished the rewards, weakening liquidity support for the pair. In a desperate attempt to mitigate the crisis, the Polyhedra Network team injected approximately $30 million in stablecoins (USDT, USDC, and BNB) into PancakeSwap’s decentralized exchange via market makers. Unfortunately, the relentless selling pressure overwhelmed this intervention, as the declining price automatically converted these stablecoins into ZKJ, proving insufficient to stem the tide. The report concludes by suggesting that the attack, combined with the pre-existing vulnerabilities, created a perfect storm resulting in the substantial loss of value.

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