In a shocking market event reminiscent of the Terra LUNA collapse, Mantra’s OM token saw a staggering 90% decline in a matter of hours, sparking intense speculation and raising concerns within the crypto community. The sudden drop, which occurred late Sunday through early Monday, came without an immediate catalyst, leaving traders and investors scrambling for answers.
OM’s price fell from over $6 to just above 40 cents during a period of typically low trading volume, where even small shifts in market activity can lead to exaggerated price movements. The volatility caught many by surprise, as the crypto market remains sensitive to unexpected liquidity events.
Mantra quickly responded to the panic, assuring their community that the downturn was unrelated to the project itself. “We want to emphasize that today’s price drop was due to reckless forced liquidations, not a failure of Mantra’s operations,” the team stated on X. “This was not initiated by our team, and we are investigating the issue. We will provide a full update once we have more clarity.”
Mantra, which specializes in tokenizing real-world assets (RWAs) like real estate and commodities, allows users to invest digitally in tangible, compliant assets. OM is used within the platform to facilitate governance and transactions.
Earlier this year, Mantra signed a high-profile partnership with DAMAC Group, a UAE conglomerate, to tokenize $1 billion worth of assets, including real estate and data centers. The OM token had gained significant attention in 2024, posting a 400% increase in value despite a relative lack of mainstream social media buzz.
Co-founder John Patrick Mullin weighed in on the crisis, attributing the sudden market movements to forced liquidations by centralized exchanges.
“We have determined that the collapse of OM’s price was primarily caused by forced liquidations triggered by centralized exchanges,” Mullin shared in a post on X. “The timing and scale of this event suggest that exchanges may have closed positions without sufficient notice, contributing to the severe drop.”
Mullin also hinted at possible market manipulation by exchanges, which could have influenced the price action.
In the aftermath, OM’s futures market saw more than $50 million in liquidations on the long side, marking a record figure for the token. Open interest, which reflects the total number of outstanding contracts, plummeted from $345 million to around $130 million, showing a swift unwinding of futures positions.
Despite Mullin’s statements, many in the crypto community have expressed doubts about the narrative of forced liquidations. A number of critics have pointed out other possible explanations for the crash, questioning whether it was solely due to exchange actions.
Star Xu, founder of the OKX exchange, responded by revealing that over $220 million in deposits were made to exchanges before the price drop.
“This is a huge scandal for the entire crypto industry,” Xu commented. “All on-chain data, including deposits and unlocks, is publicly accessible, and we can investigate the collateral and liquidation data from exchanges. OKX will provide all relevant reports for transparency.”
