Key Insights
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- Mantra’s $OM token fell from nearly $6 to a staggering low of $0.37 in a brutal 90% dump within one hour.
- The collapse in question happened on 13 April during a time that is widely considered a low-liquidity trading hour.
- According to Mantra co-founder John Patrick Mullin in a response tweet, this disaster stemmed from “reckless liquidations” across centralized exchanges.
- Given Mantra’s reputation as one of the biggest platforms for tokenizing real-world assets, the crash dealt a massive blow to investor confidence.
- According to insights from LookOnChain and others, several known wallets moved tens of millions of OM tokens to exchanges right before the dump.
- If Mantra can weather this storm, it might survive and become stronger, the same way Solana did after the FTX collapse.
The crypto industry saw one of its most dramatic moves ever this week, with the collapse of Mantra’s native $OM token.
According to reports, this token fell from nearly $6 to a staggering low of $0.37 in a brutal 90% dump within one hour.
This collapse wiped out billions of dollars in market cap and left the community stunned, as speculation continues to mount.
The incident has raised concerns about the risks of tokenized real-world assets and centralized exchanges, as well as possible pump-and-dump schemes within the crypto space.
Here’s a breakdown of what led to the crash, the response from Mantra, and what could be next for the RWA space from here.
A Sudden Collapse in Low-Liquidity Hours
The collapse in question happened on 13 April during a time that is widely considered a low-liquidity trading hour.
This period refers to times of day when thin order books can exaggerate price movements and liquidations are more likely to happen.
Within the hours between Sunday UTC and Monday Asian time, the $OM token fell from close to $6 to under $0.4.
The token has recovered slightly to trade at around $0.8, but is still over 90% down from its February peak of around $8.99.
According to Mantra co-founder John Patrick Mullin in a response tweet via X (formerly Twitter), this disaster stemmed from “reckless liquidations” across centralized exchanges.
Mullin claims that accounts were liquidated without margin calls or warnings. In essence, these exchanges force-sold large positions and triggered the downward spiral.
Binance later stepped in and noted that the price action seems to have come from “cross-exchange liquidations,” while OKX noted that the situation is “a big scandal to the whole crypto industry.”
Given Mantra’s reputation as one of the biggest platforms for tokenizing real-world assets, the crash dealt a massive blow to investor confidence, not only for the crypto space but also for the future of RWA tokenization.
Denials and Finger-Pointing Amid Wallet Tracking
Soon after this crash, rumors began to swirl about whether the crash was caused by insiders dumping their tokens on the public.
According to insights from on-chain data tracker LookOnChain, several known wallets moved tens of millions of OM tokens to exchanges just days before the crash.
More interestingly, these wallets were allegedly linked to major investors like Laser Digital.
Mantra CEO John Mullin again refuted these claims, insisting that neither the Mantra team nor its institutional investors sold any tokens before or during the collapse.
Keep in mind that Laser Digital (a subsidiary of Nomura and a strategic Mantra investor) also denied being involved in the dump.
The company took to Twitter to state that “accusations linking Laser to ‘investor selling’ are ‘misleading.’”
Shorooq Partners, another similar platform to Laser Digital, also mentioned something similar.
The firm also maintained that it had not sold any OM tokens during the crash period and that it was committed to the success of Mantra over the long term.
Mantra claims that the wallet labels in the reports from LookOnChain and Arkham Intelligence may somehow have been incorrect “We don’t know who those wallets belong to,” Mullin said.
Burn Events and Token Movements
Adding to the speculation of foul play is how blockchain data shows that Mantra DAO burned over 21 million tokens in early April.
While projects like these perform token burns to secure the price of an asset, it has an awkward coincidence with the crash, and speculators continue to point towards this event.
The Mantra team hasn’t provided any insights as to whether this token burn was connected to the dump, and speculation continues to mount.
On the other hand, the wallets moving large amounts of OM to exchanges like Binance and OKX before the crash continue to fuel suspicion, even if these wallets have no concrete links to any known investors.
The situation further brings the issues with centralization and centralized exchanges into light, especially with volatile markets like crypto.
Forced liquidations, which are the alleged culprits of the crash, tend to happen mostly on centralized exchanges and can rapidly tank prices when low liquidity hits.
When multiple exchanges simultaneously trigger these events, the resulting “cross-exchange liquidation” (as mentioned by Binance) can have devastating consequences.
Mullin criticized these actions and stated that platforms without “guardrails” can be a huge problem for “both projects and investors alike.”
A Major Test for RWA Tokens
The OM crash is a lot more than an isolated event.
It has sparked widespread doubts about the growth of the RWA space, one that many hoped would be the bridge between institutional finance and the crypto space in general.
Mantra now faces one of the toughest uphill battles to go.
Beyond the $OM token finally finding its feet and recovering, the team must also repair the reputation of the Mantra ecosystem between retail and institutional users
While there is no real evidence of foul play as of yet, speculation continues to swirl and investors are watching for follow-ups from Binance, OKX and even Mantra itself.
If Mantra can weather this storm, it might survive and become stronger, the same way Solana did after the FTX collapse.
However, in the eyes of many, the RWA space has taken one step forward and two steps back.
