Mantra's OM Token Plummets 90% Amid Massive Liquidations, Supply Changes

The Mantra (OM) project, a first-level layer 1 initiative focused on real-world assets (RWA) tokenization, has experienced a significant market capitulation, drawing comparisons to the Tera Luna (UST) crash due to the similarities in the situation. Both projects had garnered substantial trust from retail and institutional investors, scaling to a market cap of over $7.4 billion before plummeting to around $782 million on Monday, April 14, during the early European trading session.

Binance has provided insights into the Mantra crash, highlighting that more than $71 million was liquidated from the leveraged OM markets in the past 24 hours, primarily from Bybit. Binance identified cross-exchange liquidation as a major contributor to the OM price crash. Additionally, Binance pointed out that a significant change in OM tokenomics played a crucial role in the recent capitulation. The MANTRA team increased the circulating supply of OM from 888,888,888 to 1,777,777,777. Furthermore, the team uncapped the supply of OM and introduced an annual inflation rate of around 3 percent to enhance staking rewards.

Binance noted that since October of last year, various risk control measures have been implemented, including reducing the leverage levels regarding the OM token. Since January this year, Binance has also issued a pop-up warning for OM on its spot trading page, informing users about the significant changes to the tokenomics and the increase in supply.

Following the selloff of more than 43.6 million OM coins, worth over $227 million, attention has shifted to the team allocation. While the Mantra core developers have attempted to reassure investors of a stable project, a buyback from the secondary market is the only option to regain user trust. The RWA space is rapidly growing, and competition is stiff for investors to be trapped in a poorly managed project amid the anticipated altseason.

The recent crash of the OM token has sparked significant attention and speculation within the cryptocurrency community. The sudden plummet, which saw the token's value drop by approximately 90%, has been attributed to a combination of factors, including large-scale liquidations and changes in token supply. According to statements from the Mantra team, the crash was triggered by a "massive forced liquidation" by a large investor on an undisclosed exchange. This liquidation event led to a rapid sell-off, causing the token's value to plummet from around $6 to $0.5 within a short period. The team emphasized that this event was not orchestrated by them and was unrelated to the project itself. However, the community has raised questions about the timing and nature of these liquidations, suggesting that they might have been premeditated.

The community's suspicions are fueled by several observations. For instance, multiple large OM holders were seen selling off their tokens, which contributed to the crash. Additionally, there were reports of significant token deposits linked to wallets allegedly associated with the Mantra team. One such deposit involved 3.9 million OM tokens being transferred to the OKX exchange, which raised immediate concerns about potential market manipulation.

The Mantra team's response to the crash has been met with skepticism. Co-founder John Mullin attributed the price drop to "reckless liquidations" or a "massive forced liquidation" by a large investor. However, the community has pointed out that the team's actions prior to the crash, such as using market makers to artificially pump the price, have raised questions about their involvement. The team's high degree of control over the token supply has also been a point of contention. According to some analysts, the team controls a significant portion of the OM token supply, which allows them to manipulate the token's price.

The crash has also highlighted issues with the project's airdrop rules. Last November, Mantra announced changes to its airdrop rules, which sparked strong community dissatisfaction. The project initially promised a high-profile airdrop but repeatedly modified the rules, leading to prolonged vesting cycles and community frustration. This has further eroded trust in the project and its team.

The Mantra team's high degree of control over the token supply has been a recurring theme in the community's discussions. According to some analysts, the team controls 90% of the OM token supply, which allows them to manipulate the token's price. This high degree of control has made it easy for the team to pump or dump the token's price, further complicating the situation.

In conclusion, the crash of the OM token has been a complex event with multiple contributing factors. While the Mantra team has attributed the crash to large-scale liquidations, the community's suspicions about potential market manipulation and the team's high degree of control over the token supply have raised significant questions. The event serves as a reminder of the risks associated with cryptocurrency investments and the importance of transparency and accountability in the industry.