Original Author: Ma He, Foresight News
Around 4:00 AM on June 2, the native token EDGE of edgeX experienced severe and abnormal volatility. The price plummeted over 77% in a short period from around $1.14, hitting a low of $0.32, and has since rebounded to around $0.64, with a market cap of approximately $250 million.
edgeX responded immediately, explicitly ruling out hacking or platform security vulnerabilities, and pointed the finger at "intentional market manipulation by external specific entities."
edgeX stated that its protocol was not breached, and there was no hacking or security vulnerability. This price anomaly is suspected to be market manipulation intentionally carried out by external specific entities, making it a market issue rather than a platform security issue. The team is actively investigating and cooperating with relevant exchanges and platforms to trace the responsible parties. Complete investigation results will be announced upon conclusion.
edgeX emphasized that core contracts like SpotVault are operating normally, with no suspicious activity detected, further focusing attention on external market behavior rather than the protocol itself.
On-chain investigator ZachXBT commented after the incident, pointing out that edgeX supply has long been controlled by a few insiders, with low circulation. He called for the project to disclose market maker and counterparty information to improve transparency.
As the incident developed, many users linked this volatility directly to the project's past operations, expressing disappointment in the team's integrity. One community member bluntly stated: "No one is even discussing the EDGE crash anymore. This project team lacks integrity, goes back on their word, there's really little desire to bottom-fish."
Since its TGE, the EDGE token price rose from $0.7 to $1.5, and subsequently fluctuated around $1.4. The official team also launched a dedicated token website to prove transparency. In late May this year, the protocol launched V2 and adjusted its tokenomics to allocate all profits to repurchasing EDGE. According to its website data, approximately 36.54 million tokens have been repurchased so far, with a total value of around $25 million.
Additionally, related information shows the protocol received investment from Circle Ventures and Amber Group, though specific amounts were not disclosed.
Past Airdrop Controversy Planted Seeds for Subsequent Crash
This incident cannot be separated from the context of edgeX's previous airdrop controversy. In April 2026, the author detailed the entire process of the TGE sparking community dissatisfaction in the article "The Complete Story of the edgeX Airdrop Debacle: An Elaborately Designed Scheme?". The project had promised the community would receive 25% of the token supply, but the actual proportion allocated to ordinary traders was only about 4%, while approximately 14% (valued at around $94.6 million at the time) flowed to partner wallets. Arkham's token flow chart showed at least 80 related addresses were created in 2025, exhibiting consistent behavioral patterns: small test deposits followed by large deposits, and concentrated outflows after TGE, involving about $90 million in token transfers, with some funds flowing to exchanges.
The more core controversy lay in the opaque points exchange mechanism. User feedback indicated huge discrepancies in exchange ratios despite identical trading volumes. Furthermore, the gap between estimated point value (pre-TGE market expectations of $30-40 per point or higher FDV) and actual received amount exceeded 80%. Early contributors and NFT holders also encountered cases of "lowest allocation across the network." Community members flooded the official Twitter account with angry comments, prompting the team to temporarily disable comments.
Afterward, edgeX announced it would lock the controversial 14% share for one year and initiate a buyback, but rejected the community's demand to burn the tokens on Ethereum.
These unresolved issues directly planted the seeds for the current volatility: concentration of chips in a few addresses or related parties makes it easier for external entities to influence prices through large-scale operations. Low circulation is not accidental but an inevitable result of early allocation and lock-up arrangements. When abnormal selling pressure appears in the market, the lack of sufficient depth as a buffer easily triggers a chain reaction.
Structural Risks and Transparency Test
edgeX once carved a niche in the sector with its trading speed, low slippage, and perpetual contract innovation. After TGE, the project experienced a phase of price increase, and its trading volume and fee revenue repeatedly ranked high in DeFi. According to the latest data from DefiLlama, the protocol's total fee revenue over the past 30 days was $10.7 million, and the perpetual DEX's trading volume over the past 30 days reached $42.765 billion.
However, from the airdrop allocation controversy to this price anomaly, this model of 'low circulation + high control + opaque market making' has become a tried-and-true 'serial scam scheme' for new projects in recent years. Mouthing 'community first' while wallets honestly dump tokens to related parties is just a single-player game dressed in DeFi clothing.
The accusation of external manipulation is difficult to prove immediately, but the traceable abnormal on-chain transfers are enough to raise community alarm.
Ironically, just as it faces the whirlpool of plummeting token prices, a price prediction market for its EDGE token has quietly launched on Polymarket.
The project team is busy proving its innocence, trapped retail investors are angrily demanding justice. And on Polymarket, some players have already started betting on how much it will rise or fall by this year.
