The recent flash crash of ZKJ and KOGE tokens has shocked the crypto community, especially since both are tied to Binance’s Alpha Points program.
The latest data suggests the ZKJ and KOGE incidents serve as a lesson on liquidity concentration risks and the role of “whales” in the market.
What Sparked the Sudden Meltdown in ZKJ and KOGE Tokens?
Polyhedra confirmed that the flash crash‘s origin and progression stemmed from abnormal on-chain transactions. Polyhedra is closely monitoring the ZKJ/KOGE trading pair, which has experienced unusual on-chain activities quickly.
The contract linkage with ZKJ may have caused KOGE to be the first token affected. This triggered a domino effect as heavy liquidity withdrawals occurred. On-chain data from Lookonchain indicates that large wallets withdrew liquidity from both pools.
One wallet withdrew 61,130 KOGE, worth $3.76 million, and 273,017 ZKJ, worth around $532,000, before the market plummeted. This move pushed KOGE’s price from $62 to $24 and ZKJ’s from nearly $2 to $0.30, a decline of 61% and 85%, respectively.
Based on these actions, on-chain analyst Ai Yi suggests this flash crash could be a pre-planned “harvesting operation.”
“Three major addresses targeted the huge trading volume and liquidity of the two tokens in the context of Binance Alpha. Tonight, the dual pressure of ‘large withdrawal of liquidity + continuous selling’ caused ZKJ and KOGE to collapse one after another, and no one was spared,” Ai Yi commented.
Ai Yi also believes the timing of this flash crash may be linked to a consecutive decline in Binance Alpha trading volume over several days. Data from Dune also shows a downward trend since early June. Notably, after the flash crash, trading volume on Binance Alpha dropped to approximately $770 million. It is significantly lower than the peak of about $2 billion on June 8.
Price Manipulation Allegations
Immediately after the sharp decline in ZKJ and KOGE prices, the community raised suspicions about 48Club, the issuer of KOGE, engaging in price manipulation. However, 48Club quickly denied the allegations. He also announced a new trading reward plan to restore confidence.
Binance adjusted the Alpha Points calculation rules and will be effective from 00:00 UTC on June 17, 2025. According to Binance, the exchange attributed the price volatility to large holders withdrawing liquidity and a liquidation cascade effect.
The decision to exclude trading volume between Alpha tokens (such as ZKJ and KOGE) from point calculations aims to reduce concentration risks and maintain market fairness.
This incident raises questions about the sustainability of trading incentive programs like Alpha Points. Although Polyhedra asserts that the project’s fundamentals remain solid and is reviewing the incident, investors should closely monitor updates from relevant parties.
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