- Polyhedra blames liquidity attacks for ZKJ’s crash from $2 to $0.30.
- ZKJ’s price drop erased $500M in market value, hitting $0.39.
- Polyhedra commits to buying back tokens and preventing future attacks.
Polyhedra Network, the developer behind the interoperability protocol zkBridge, has provided details on the sudden price collapse of its ZKJ token. The company is pointing to a targeted “liquidity attack” and forced liquidations as the primary factors behind the crash. The event saw ZKJ’s price fall from around $2 to below $0.30 within hours.
In an official statement, Polyhedra co-founder Tiancheng Xie explained that a coordinated, on-chain liquidity attack caused the crash. The company’s report asserted that these events were orchestrated by malicious actors.
Polyhedra’s report pointed out that these events were not incidental but were instead orchestrated by malicious actors with the intent to destabilize the token’s value.
ZKJ Crash Wiped Out Over $500 Million in Market Value
The sudden fall in ZKJ’s value wiped out approximately $500 million in market capitalization at its peak. The token, which had maintained a stable price near $2 since December 2024, crashed to a low of $0.4062 by the time of publication.
Related: Is $ZKJ the Next LUNA? Polyhedra Token Crashes 80% After ‘Abnormal’ On-Chain Activity
Prior to the crash, ZKJ had seen major volatility, with its price reaching an all-time high of $3.40 shortly after its March 2024 launch before stabilizing and gradually increasing in value later in the year.
Co-Founder Vows to “Turn Criticism into Praise Again”
Xie expressed confidence in the company’s ability to recover, referencing a previous incident where the team successfully overcame similar challenges. “I know everyone’s criticizing us right now, but we’ve faced this before. We turned criticism into praise last time, and we can do it again, even better than before,” Xie remarked.
Polyhedra is known for its zkBridge technology, which provides faster zero-knowledge proofs in both generation and verification, making it a major player in the interoperability space. However, the sudden crash is a major setback for the company, which had recently reached a $1 billion valuation following a successful $20 million funding round led by Polychain Capital in March 2024.
Related: KuCoin Lists Polyhedra (ZK), Unlocking Improvements in Computational Power
Despite the downturn, Polyhedra has vowed to continue its efforts to stabilize ZKJ and safeguard the project from future attacks.
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