Sahara AI issued an update on the SAHARA token price volatility event, stating that it had confirmed team and investor tokens were not sold or transferred. The project also said its designated market makers, Amber Group and Herring Global, operated normally during the event, and that all token smart contracts were secure.
Token Holdings, Market Makers and Contract Checks
According to Sahara AI, the review covered team and investor token movements, the activity of designated market makers, and the status of the token smart contracts. Its stated findings were that team and investor tokens had not been sold or moved, Amber Group and Herring Global showed normal operations during the incident, and no security issue was identified in the token smart contracts.
Leveraged Long Positions and Forced Liquidations
Sahara AI attributed the event to a chain reaction of leveraged futures liquidations. In the three weeks before June 9, leveraged long positions in SAHARA futures had continued to build to a historical high while liquidity remained thin. Once selling pressure emerged, it triggered large-scale automatic liquidations. At the peak, liquidations reached as much as $992,000 worth of SAHARA per second, and in the first two minutes, 60% of futures orders were passive sell-side liquidation orders.
On pricing, Sahara AI said the SAHARA futures price fell 64% within 5.5 minutes, while $60 million in futures orders were executed within 30 minutes. The futures price at one point traded 27% below the spot price, which the project said showed that the pace of liquidations was faster than the market’s ability to absorb them. The project also addressed large on-chain token transfers seen during the incident, saying they were pre-arranged deposits into a Chainlink CCIP cross-chain bridge contract to provide liquidity for the BNB Chain bridge. Sahara AI said its team is working with exchanges to determine the initial cause of the selling pressure and will later release final investigation results and strengthening measures.