OM Token Collapses 20% as Single Trader Manipulates Exchanges

The recent collapse of the OM token at MANTRA has left the community in a state of confusion. The incident, which resulted in the erasure of $5.5 billion, was triggered by a single trader manipulating two exchanges. This event underscores the fragility of many token projects, where a comparatively small amount of liquidity can lead to a complete collapse despite an ostensibly large market cap.

The initial trigger of the OM crash was a single trader on the Binance perpetuals market. This trader executed a ~1 million USD short position, causing over 5% slippage in microseconds. This sudden drop was intentional, as the trader knew the impact it would have on the market. Following this initial anomaly, the trader continued to dump short positions at five-second intervals, exacerbating the overall crash. As a result, the OKX spot market saw a discount of nearly 20%.

On the OKX exchange, a massive whale used a limit sell order to keep the price fixed for over a minute. This strategy allowed market makers and arbitrage bots to buy the assets despite the broader market panic. By doing so, the perpetrator was able to dump OM tokens while the crash was underway. The issue here is not that OM fell due to a nefarious actor trying to engineer a crash, but rather that a single entity could manipulate the markets so thoroughly.

For an attack like this to be successful, OM’s market cap had to be substantially more fragile than anticipated. Even though OM’s market cap was theoretically very high, it took a comparatively small investment to crash the RWA token like a house of cards. Some have even speculated that this trader wasn’t trying to cause a crisis but was instead an investor forced to sell due to loan terms or risk limits. Slight manipulation could have led to a larger catastrophe.