MANTRA’s OM Token Collapse Sparks Market Chaos
The OM token, a cornerstone of the MANTRA blockchain ecosystem, lost over 90% of its value in a single day, erasing $5.5 billion in market capitalization and triggering $71.8 million in investor liquidations. The sudden crash, which saw OM drop from $6.30 to $0.37, has reignited debates about risk management in crypto markets and centralized exchange practices.
What Triggered the Crash?
MANTRA’s leadership attributed the collapse to “reckless forced liquidations” by centralized exchanges. Co-founder John Patrick Mullin claimed exchanges abruptly closed leveraged positions without adequate warning, creating a domino effect. On-chain data reveals 43.6 million OM tokens ($227 million) were deposited to exchanges like OKX and Binance before the crash, with two wallets linked to strategic investor Laser Digital.
Key Factors:
• Exchange liquidations: Over $71 million in leveraged positions were wiped out, primarily on Bybit and Binance.
• Tokenomics changes: MANTRA doubled OM’s supply in late 2024, introducing inflation and uncapping total tokens.
• Suspicious transfers: 17 wallets moved millions of OM to exchanges hours before the crash, per OKX CEO Star Xu.
Project Leadership Responds
Mullin denied team involvement, stating all project-held tokens remain locked under vesting schedules. He emphasized MANTRA’s long-term focus, citing partnerships like a $1 billion real estate tokenization deal with Dubai’s DAMAC Group. However, community skepticism persists, fueled by:
• A 2024 Hong Kong court order requiring six MANTRA DAO members to disclose finances amid misappropriation allegations.
• Claims that the team controls 90% of OM’s circulating supply—a figure Mullin disputes.
Exchanges React
• Binance: Reduced leverage tiers for OM in 2024 and added tokenomics warnings in January 2025.
• OKX: CEO Star Xu called the event a “big scandal” and pledged transparency via on-chain analysis reports.
Market Impact and Lessons
The crash mirrors past crypto crises like Terra’s LUNA collapse, highlighting systemic risks in projects with concentrated token ownership. While OM rebounded 200% to $1.10 post-crash, analysts warn of lingering volatility. Crypto sleuth ZachXBT noted the difficulty in analyzing Cosmos-based chains like MANTRA, complicating efforts to trace fund flows.
