Mantra's OM Token Plummets 92% in Hours, Losing $5.4 Billion

The recent collapse of the Mantra (OM) token has drawn comparisons to the Terra ecosystem crash in May 2022, with some commentators labeling Mantra as the “next Terra.” However, many in the community argue that the two projects share nothing in common besides visual similarities in their price charts.

Ben Yorke, vice president of ecosystem at the decentralized finance (DeFi) project Woo, stated that while it is tempting to draw parallels between OM’s recent crash and the Terra Luna collapse, they are fundamentally very different events. Alexis Sirkia, chairman of the DeFi infrastructure project Yellow Network, agreed, noting that there are no real similarities apart from the visual of the price dropping.

Mantra’s OM token experienced a dramatic drop of 92% on April 13, falling from over $6 to around $0.52 within hours. This resulted in a loss of $5.4 billion in market capitalization in less than four hours. In contrast, TerraClassicUSD (formerly UST) took five days to lose a similar percentage, shedding $17.2 billion. The LUNA crash was more gradual, starting to plummet some time before the UST token depegged on May 9, 2022.

Despite the visual resemblance of the price charts, there are significant structural differences between the projects. Woo’s Yorke and Yellow Network’s Sirkia agreed that Terra’s collapse was systemic and occurred due to the failure of its algorithmic stablecoin, while Mantra was not proven to be subject to any systemic flaws. Yorke suggested that OM’s crash involved a “large number of insider-held tokens” moved to exchanges, which sparked cascading liquidations. He noted that the issue wasn’t a structural flaw in the protocol, but rather a breakdown in token handling and trust.

Sirkia emphasized that Mantra is not broken and that there was no peg to fail. He stated that the event was a market-driven correction rather than a protocol failure. Sirkia added that the team remained transparent throughout the process and that after the drop, OM bounced over 200%, showing real demand and community belief. This kind of recovery never happened with Luna.

Yorke and Sirkia’s comments came two days after the OM crash, with the token slightly recovering to $0.80 by the time of publishing after a brutal sell-off from above $6 to $0.50 per token on April 13. According to the latest update by Mantra CEO John Mullin, Mantra expects to share a post-mortem report detailing the events leading to the crash of the OM token in the next 24 hours.