Welcome to The Protocol, CoinDesk's weekly wrap-up of the most important stories in cryptocurrency tech development. I'm Margaux Nijkerk, CoinDesk’s Tech & Protocols reporter.

In this issue:

Polyhedra Blames Liquidity Attacks for Sudden 80% Price Drop in ZKJ, Promises BuybackUK Startup Optalysys Debuts Server for BlockchainsKraken-Backed Ink Foundation to Airdrop INK Token, Starting With Aave-Powered Liquidity ProtocolUnknown block type "divider", specify a component for it in the `components.types` option

Network News

POLYHEDRA BLAMES LIQUIDITY ATTACKS FOR DROP IN TOKEN PRICE, RELEASES BUYBACK PLAN: Polyhedra, a crypto protocol, announced a buyback plan to restore trust after its token, ZKJ, plummeted over 80% in minutes. An initial post‑mortem released in Asian morning hours laid out various factors resulting in the collapse, including a supposed coordinated liquidity attack on PancakeSwap’s ZKJ/KOGE pool, substantial ZKJ deposits by market-making company Wintermute into centralized exchanges, and a cascade of liquidations on CEXs like Bybit. On-chain data reveals that several addresses had drained millions from the ZKJ/KOGE pool. One removed about $4.3 million in liquidity provider (LP) tokens and dumped 1.57 million ZKJ; others followed, unloading close to 1 million ZKJ each. When the shallow KOGE/USDT pool couldn’t absorb the sell pressure, activity spilled over into the deeper ZKJ/USDT pool, triggering a liquidity spiral, the team claimed. To stem the hemorrhage, Polyhedra’s team injected approximately $30 million in USDT, USDC, and BNB as DEX liquidity. It added that no ZKJ holdings belonging to the team were sold. Polyhedra affirms it’s conducting a full technical investigation, and its upcoming buyback initiative aims to both offset the attack’s impact and deter similar future exploits. — Shaurya Malwa Read more.

OPTALYSYS DEBUTS SERVERS FOR BLOCKCHAINS: Optalysys, a U.K.-based startup focused on secure computing, has introduced what it claims to be the world’s first server for blockchains that can process data at scale without decrypting it. The firm’s LightLocker node is a server that uses Fully Homomorphic Encryption (FHE), a mathematical technique allowing computations to be performed on encrypted data without compromising the encryption. The last year has seen a couple of firms raising money and exploring applications of FHE within the cryptocurrency space. Optalysys says its server hardware is purpose-built for blockchain encryption, and offers a cheaper alternative to costly and inefficient GPU-based systems, using 40% less energy. — Ian Allison Read more.

INK FOUNDATION TO AIRDROP TOKEN: The Ink Foundation, the nonprofit behind layer 2 Ink, is launching its native token INK in an attempt to bootstrap on-chain capital markets through a liquidity-first strategy. The token will debut on a decentralized finance (DeFi ( DEFT )) lending and trading protocol built on Aave, and distribution will begin via an airdrop to early users. There will be no governance gimmicks or fluctuating emissions schedules, the foundation said. INK has a hard cap of 1 billion tokens minted, with no recourse to change the supply via governance proposals. And unlike other Superchain members, Ink says its layer 2 governance will remain separate from the token. — Shaurya Malwa Read more.

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In Other News

A Securities and Exchange Commission (SEC) filing posted Monday night outlines the relationship between Tron DAO, Justin Sun, and SRM Entertainment ( SRM ), a Nevada company in the process of changing its name to Tron Inc. The filing details a $100 million private investment in public equity (PIPE) deal, paid entirely in TRX tokens, that gives Sun’s father, Weike Sun, board control and positions Tron-aligned advisors in key governance roles. Weike was named chairman, while Zhihong Liu, also known as Steve Liu, a strategic adviser to Tron DAO and the CEO of stablecoin issuer Techteryx, and Zi Yang, a senior executive at Tronscan, joined the board’s audit, compensation, and nominating committees, according to the filing. — Sam Reynolds Read more.U.S. banking giant JPMorgan ( JPM ) has announced the pilot of a permissioned USD deposit token called JPMD on Base, the layer 2 Ethereum network built by listed exchange Coinbase (COIN). Earlier this week, the bank filed a trademark application for a crypto-focused platform named JPMD, designed to to offer services such as trading, exchange, transfer, and payment services for digital assets, as well as issuance of digital assets. The institution-focused JPMD, an alternative to stablecoins for the bank’s clients, marks the first deployment of JPMorgan’s Kinexys distributed ledger technology studio on a public blockchain, according to a press release. — Ian Allison Read more.Iranian crypto exchange Nobitex has been hacked for $90 million by Israel-linked hacking activist group Gonjeshke Darande, according to a blog post from blockchain security firm Elliptic. The group said in an X post: “After Bank Sepah, it was Nobitex's turn,” referencing their Tuesday cyberattack on Iran’s state-owned lender. They warned that Nobitex’s internal data and source code would be released within a day, and any assets left on the exchange would be “at risk.” — Shaurya Malwa Read more.Unknown block type "divider", specify a component for it in the `components.types` option

Regulatory and Policy

The overwhelming bipartisan passage of the U.S. Senate's stablecoin bill, with a 68-30 final vote that saw a huge surge of Democrats joining their Republican counterparts on Tuesday, sets a new high-water mark of crypto policy efforts in the U.S. as the legislation now heads to the House of Representatives. The major Democratic backing for the Guiding and Establishing National Innovation for U.S. Stablecoins of 2025 (GENIUS) Act helps give it momentum as it lands in the other chamber, where House lawmakers can either vote on it as written or pursue changes that will require a final round in the Senate before it can head to President Donald Trump's desk. — Jesse Hamilton Read more.Unknown block type "divider", specify a component for it in the `components.types` option

Calendar

June 8-22: Berlin Blockchain Week, BerlinJune 24-26: Permissionless, BrooklynJune 30-July 3: EthCC, CannesJuly 16-18: Web3 Summit, BerlinSept. 22-28: Korea Blockchain Week, SeoulOct. 1-2: Token2049, SingaporeNov. 17-22: Devconnect, Buenos AiresDec. 11-13: Solana Breakpoint, Abu DhabiFeb. 10-12, 2026: Consensus, Hong KongMay 5-7, 2026: Consensus, Miami