Cryptocurrency tokens ZKJ and KOGE experienced catastrophic price declines exceeding 50% following the complete drainage of their liquidity pools and panic selling across markets. The collapse began when the KOGE/USDT liquidity pool was entirely depleted, forcing investors to convert KOGE holdings into ZKJ tokens.
This sudden conversion wave overwhelmed the ZKJ/USDT liquidity pool, triggering a cascading price collapse across both assets. The incident sparked intense community backlash, with accusations of project negligence and liquidity mismanagement trending under the phrase ‘rugged from both sides’ on social media platforms.
The crisis highlights inherent vulnerabilities in the interconnected design of ZKJ and KOGE ecosystems, where shared liquidity pools and joint yield farming strategies created systemic fragility. Market pressures are expected to intensify with a scheduled ZKJ token unlock later this week, representing approximately $32 million worth of tokens (5.3% of total supply) that risks further dilution.
This event underscores critical operational risks within tightly coupled DeFi projects, emphasizing the urgent need for improved liquidity safeguards and transparent governance protocols to maintain ecosystem stability.