Polyhedra Promises Buyback Following 80% Drop in ZKJ Token Price
Polyhedra, a crypto protocol valued at $1 billion, announced a buyback plan to restore trust after its token, ZKJ, plummeted over 80% within minutes.
- ZKJ dropped from approximately $2 to 32 cents in under an hour, losing nearly $500 million in market cap.
- The decline was attributed to a coordinated liquidity attack on PancakeSwap's ZKJ/KOGE pool, significant ZKJ deposits by Wintermute into centralized exchanges, and liquidations on platforms like Bybit.
- On-chain data showed addresses withdrew millions from the ZKJ/KOGE pool, with one draining about $4.3 million in LP tokens and dumping 1.57 million ZKJ.
- As sell pressure intensified, it triggered a liquidity spiral affecting the ZKJ/USDT pool.
- Wintermute deposited over 3.39 million ZKJ into centralized exchanges during the crash window.
- Approximately $94 million in leveraged long positions were liquidated between 12:00 and 14:00 UTC, exacerbating the price drop.
- To stabilize the situation, Polyhedra injected roughly $30 million in USDT, USDC, and BNB as DEX liquidity.
- No ZKJ holdings belonging to the team were sold during the incident.
- A full technical investigation is underway, with the buyback initiative aimed at offsetting the attack’s impact and preventing future incidents.
- While token prices rose by over 50% post-report, they later reversed gains, currently reflecting a 1.3% increase over the past 24 hours.