On June 15, 2025, Polyhedra Network’s native token, $ZKJ, suffered a catastrophic 80%+ price drop, plummeting from $1.90 to $0.32 in under an hour, obliterating nearly $100 million in long positions.
While liquidity manipulation, wash trading, and panic selling were key culprits, the shadow of an impending token unlock loomed large, amplifying fear and contributing to the chaos.
This article unpacks the role of the token unlock in ZKJ’s meltdown, exploring its mechanics, market impact, and what it means for Polyhedra’s future. Buckle up—this is a wild ride through the crypto market’s underbelly.
Token Unlocks 101: The Basics
Before diving into ZKJ’s case, let’s break down what a token unlock is.
In crypto, token unlocks are scheduled releases of previously locked tokens, often allocated to early investors, team members, or ecosystem reserves.
These tokens are typically locked for a set period post-launch to prevent immediate dumping and stabilize prices.
When the lockup expires, the new supply hits the market, potentially increasing selling pressure if demand doesn’t keep up.
For ZKJ, a token unlock of 15.5 million tokens—5.3% of its total 1 billion supply, valued at $32 million at pre-crash prices—was scheduled for June 19, 2025, just days after the crash.
The ZKJ Unlock: Timing and Context
Polyhedra Network, known for its zkBridge protocol and zero-knowledge proof tech, had been riding high on Binance Alpha’s farming program, with ZKJ/KOGE liquidity pools boasting over $20 million in liquidity and daily trading volumes hitting $50 million at times.
But this stability was a mirage, fueled by wash trading and coordinated farming.
As the June 19 unlock approached, market participants grew jittery.
The unlock represented a significant chunk of new supply, and with ZKJ’s price already wobbling from artificial volume, traders feared dilution would tank the token further.
The tokenomics of ZKJ provide context: 10% of the 1 billion total supply is allocated to core contributors, 15% to foundation reserves, 15% to community and marketing, 28% to investors, and 32% to ecosystem incentives.
With 292.86 million ZKJ in circulation pre-crash, the 15.5 million token unlock was a 5.3% increase in circulating supply—not massive, but enough to spook a market already on edge.
How the Unlock Fueled the Fire
The ZKJ crash wasn’t directly caused by the unlock itself—after all, it hadn’t happened yet. But the anticipation of it acted like gasoline on a smoldering fire. Here’s how it played out:
Preemptive Selling by Big Players: On-chain data suggests large wallets (e.g., addresses like 0x1A2, 0x078) started unwinding positions ahead of the unlock. Knowing 15.5 million tokens were about to hit the market, these players likely sold early to avoid getting caught in a post-unlock dump. This selling pressure drained liquidity from the ZKJ/USDT pair, setting the stage for the crash.
Amplified FUD on Social Media: As the unlock date neared, posts on X began sounding alarms. One user noted, “15.5m ZKJ to be unlocked in 3 days but that shouldn’t be the cause… price was holding strong before now lol,” while another warned of “another big unlock on June 19, so stay alert, stay away.” This chatter fueled panic, with retail traders rushing to sell before the expected dilution. The lack of clear communication from Polyhedra’s team didn’t help, leaving the community to speculate wildly.
Liquidity Crisis Synergy: The unlock’s timing couldn’t have been worse. The ZKJ/KOGE liquidity pool was already under strain from coordinated wallet dumps, which siphoned liquidity and triggered a cascade of liquidations. The fear of new tokens flooding the market pushed traders to exit en masse, overwhelming the ZKJ/USDT pair and sending prices into a nosedive.
Market Psychology and Dilution Fears: Token unlocks often spark fear of dilution, especially in projects with shaky fundamentals. For ZKJ, the 5.3% supply increase wasn’t catastrophic on paper, but in a market propped up by artificial volume, it was a death knell. Traders saw the unlock as a signal that early investors or insiders might cash out, eroding confidence further.
Comparing ZKJ’s Unlock to Other Projects
To put ZKJ’s unlock into perspective, let’s look at May 2025’s broader token unlock wave, which saw $4.4 billion in tokens released across projects. Sui (SUI) unlocked $334.63 million (9.5% of its market cap), Pyth Network (PYTH) released $333.86 million (58.3% of its cap), and Aptos (APT) and Arbitrum (ARB) each unlocked smaller percentages (1.83% and 1.95%, respectively).
These unlocks caused short-term price dips, with PYTH dropping 10% post-unlock due to its massive supply increase.
ZKJ’s 5.3% unlock was moderate by comparison, yet its impact was outsized because of Polyhedra’s liquidity issues and reliance on farming hype.
Historical data shows unlocks don’t always spell doom. Solana (SOL) and LayerZero weathered large unlocks with minimal price damage when fundamentals were strong.
But for ZKJ, the combination of a fragile liquidity pool and waning Binance Alpha momentum made the unlock a catalyst for panic.
The Aftermath: ZKJ’s Road Ahead
Post-crash, ZKJ is limping along at $0.32, with a market cap of $235.39 million and a bearish RSI of 23.9, signaling oversold conditions but no clear recovery trigger.
The June 19 unlock went through, adding 15.5 million tokens to circulation, and analysts warn of further selling pressure if demand doesn’t rebound.
Polyhedra’s zkBridge and Expander tech remain cutting-edge, but the project’s reputation has taken a hit.
Social media is rife with accusations of mismanagement, and the team’s silence hasn’t helped.
Could ZKJ recover? Some on-chain data shows wallets accumulating at these lows, betting on a bounce.
But with 1 billion total tokens and only 308.39 million circulating, future unlocks could keep pressure on the price.
Polyhedra’s $20 million funding round in 2023 and partnerships with EigenLayer and WSPN show promise, but restoring trust will require transparent governance and real adoption of its tech.
Lessons for Crypto Investors
The ZKJ unlock saga underscores a harsh reality: token unlocks can be a death sentence for projects with weak fundamentals or artificial hype. Here’s what to watch for:
Liquidity Matters: Projects reliant on concentrated liquidity pools or farming programs are vulnerable to shocks. Check on-chain data for wallet concentration and pool health.
Unlock Schedules: Always review tokenomics and vesting schedules. A 5% unlock can tank a token if the market’s already shaky.
Community Trust: Silence from a project’s team during a crisis amplifies FUD. Look for projects with proactive communication.
Real Demand: Hype from Binance Alpha or similar programs can mask a lack of organic adoption. Dig into whether a project’s tech is actually being used.
The ZKJ crash wasn’t just about the unlock—it was about a fragile ecosystem buckling under pressure. For traders, it’s a reminder to stay vigilant, question volume spikes, and never bet the farm on a single token.
For Polyhedra, it’s a wake-up call to shore up liquidity, rebuild trust, and prove its tech can outshine the noise.
The crypto market doesn’t forgive easily, but it always gives you a chance to get back in the ring.
Will ZKJ step up? Only time will tell.!!
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