In a dramatic turn of events, Mantra’s OM token plunged 90% in just a few hours, evoking comparisons to the collapse of Terra’s LUNA earlier this year. The sudden drop sparked numerous theories and allegations within the crypto community, with many speculating about the cause of the steep decline.
OM fell from over $6 to just above 40 cents between late Sunday and early Monday, during the crypto market’s typically quiet trading hours. Such low liquidity periods are often ripe for volatile price swings, especially when larger-than-usual volumes hit the market.
“We want to assure you that MANTRA is fundamentally strong,” the Mantra team posted on X after the dramatic drop. “Today’s activity was triggered by reckless liquidations, not due to any issues with the project itself. We want to make it clear that this was not our doing. We are investigating the situation and will provide more details as soon as we have them.”
Mantra enables the tokenization of real-world assets (RWAs) like real estate and commodities, allowing compliant digital investments in physical assets. The OM token is central to these transactions and the platform’s governance.
In January 2025, Mantra announced a partnership with DAMAC Group, a UAE-based conglomerate, to tokenize up to $1 billion in assets, including real estate, hospitality, and data centers.
OM was one of 2024’s top performers, with its price surging over 400%, despite relatively low discussion on crypto-related social media platforms. This impressive rise had caught the attention of both traders and investors, intrigued by the token’s growth.
However, co-founder John Patrick Mullin suggested that the massive price movement was likely caused by exchanges forcibly liquidating OM positions, which he believes led to a widespread market disruption.
“We believe the OM market crash was caused by reckless forced closures initiated by centralized exchanges on OM account holders,” Mullin stated in a post on X. “The speed and depth of the crash point to a sudden closure of positions without adequate notice or warning.”
Mullin went on to accuse centralized exchanges of intentionally manipulating market conditions.
OM futures saw over $50 million in liquidations on the long side, a record for the token. The open interest plummeted from $345 million to just over $130 million, signaling a rapid unwinding of open futures positions.
However, not all crypto experts are convinced by Mullin’s explanation. Some have openly criticized the narrative, with many offering dismissive comments under his posts.
Star Xu, founder of OKX, responded to the situation by noting that over $220 million worth of token deposits to exchanges were flagged before the price collapse.
“This is a major scandal for the entire crypto industry,” Xu wrote. “All on-chain unlock and deposit data is publicly available, and major exchanges’ collateral and liquidation information can be investigated. OKX will compile all relevant reports and make them available to the public.”
