The crypto-sphere woke up on Monday with a shocking news of $OM token witnessing a catastrophic 90% crash, wiping billions of dollars within hours and raising alarm bells among investors worldwide.
Within 24 hours, the $OM token (MANTRA), that ranked among top 25 token projects worldwide, lost $ 5 billion in market value as its price came plummeting from $6.30 to $0.40.
The sheer market value of OM lost in a “single candle”, despite an overall positive crypto market sentiment, has left investors anxious and seeking for answers.
The developers of MANTRA project have reiterated their confidence in the OM whitepaper and have rather blamed centralized exchanges for initiating “forced closures” of OM account holders as a “coordinated attack” against the project.
Take for example this recent statement from JP Mullin, co-founder of $OM token,
“We have determined that the OM market movements were triggered by reckless forced closures initiated by centralized exchanges on OM account holders. The timing and depth of the crash suggest that a very sudden closure of account positions was initiated without sufficient warning or notice….we believe this was a coordinated attack.”
Despite multiple assurances from MANTRA team, the crypto community has remained skeptical of the project as they demand further transparency from the creators on the tokenomics behind the token and how a major project was brought to its knees within hours.
In this article, we will explain the controversy behind OM token crash, its tokenomics, and a possible future after $5 billion have been wiped off.
OM Token Crash: How it happened and Controversy behind it ?
MANTRA (OM) was considered one of the most promising RWA asset due to its meteoric 200x rise since Q4 2023. However, the token’s surprise downfall appears to be not rooted in weak fundamentals but in the unreliable market making.
How OM Token Crash Unfolded?
The crash in OM price was triggered over the weekend when a massive 4 million tokens were offloaded on OKX, leading to a steep decline below price $3 mark.
While it was the weekend, the low liquidity magnified the impact and influenced a chain reaction of liquidations in the market. In the facade, entities like OTC buyers, tier-1 market makers, and investors scrambled to exit their positions and further accelerated the freefall.
The sell-off reportedly began as the second-largest OM wallet started undelegating and sending tokens to exchanges, hinting at an orchestrated rug pull. However, the fall was not a sudden event as various red flags were already in play since past few months with altered tokenomics, hoarding of 90% of the supply, delayed community airdrops, and secret OTC deals to artificially inflate prices.
While these tactics worked in the short term, they ultimately set the stage for the token’s dramatic collapse.
What did MANTRA Developers say?
Shortly after the crash, Mantra co-founder JP Mullin took to X (formerly Twitter) to pacify the community. However, he has squarely blamed the centralized crypto exchanges and their alleged arbitrary actions behind the catastrophic fall of OM token.
That this (crash) happened during low-liquidity hours on a Sunday evening UTC (early morning Asia time) points to a degree of negligence at best, or possibly intentional market positioning taken by centralized exchanges. Centralized exchange partners play an important role in providing liquidity to projects like ours. We work closely with them, however they continue to exercise enormously high levels of discretion. When discretionary powers are exercised without due internal and external oversight, dislocations like what recently happened can and will occur, hurting both projects and investors alike.,” said Mullin.
However, not many from the community were willing to buy Mullin’s defense as they accused him of not being transparent enough.
For now, the developers have promised a community connect session on X to further provide clarity on the sudden market movement. However, it has not done much to pacify the market that is already pulling the rug on OM token as we speak.
Let us further understand MANTRA in detail, its use cases, benefits and application of MANTRA in real-world asset tokenization.
Evolution of MANTRA
The evolution of the MANTRA chain began with the introduction of MANTRA Finance, a project that focuses on bridging traditional finance (TradFi) with decentralized finance (DeFi). With an expected valuation of $16 trillion by 2030, on-chain tokenization of real-world assets (RWAs) proves to be a crucial part of the crypto world.
However, the current blockchain ecosystem lacks some of the essential components like compliance and regulatory frameworks, RWA-focused modules, fragmented liquidity and security.
MANTRA, a purpose- built RWA layer blockchain, optimizes transactions both onchain and cross-chain powered by Inter-Blockchain Communication Protocol (IBC).
What is MANTRA?
MANTRA is a Layer 1 blockchain platform which is designed specifically for real-world asset tokenization. The chain helps businesses and individuals to adhere to real-world regulatory requirements.
MANTRA is a decentralised finance platform that offers financial services such as staking, lending, borrowing, and asset management. The chain is a part of the broader MANTRA ecosystem, with emphasis on community engagement.
Its native token, OM, plays an important role in the ecosystem as it serves as the utility token for governance, incentives, staking rewards and empowering users through decision-making process.
It offers a permissionless chain for the tokenization and trading of real-world assets in accordance with statutory requirements.
What is RWA Tokenization?
Real-World Assets (RWA) in crypto is tokenizing physical assets like real estate, art and commodities on blockchain. Real-world asset tokenization is the process of converting these valuable tangible/physical assets into tradeable digital tokens.
This tokenization helps to ease the complex process involved in asset ownership and trading of RWAs.
Benefits of RWA Tokenization
Following are the key benefits involved in the RWA tokenization:
Increases Liquidity
Real-world assets usually face liquidity issues but after RWA tokenization, these assets can be traded globally 24/7. Hence, increasing the liquidity of RWAs.
Lowers Costs
RWA tokenization facilitates a smooth transaction process which removes intermediaries and ultimately reduces the transaction costs.
Expands Accessibility
The tokenization process has increased investment opportunities among users and simplified access to real-world assets without their physical movement.
Enhances Security
The crypto market has been criticized because of its high volatility but after RWA tokenization, it has reduced the risk of losing funds.
Application of MANTRA in RWA Tokenization
MANTRA plays a significant role in tokenization and management of real-world assets. MANTRA uses numerous decentralized tools that help in the tokenization of RWAs.
Advanced Blockchain Infrastructure
The MANTRA ecosystem has its blockchain named MANTRA chain. It is a layer 1 blockchain that is developed to handle various complex processes and requirements of RWA tokenization. This blockchain ensures faster transactions, high compatibility with decentralised applications (dApps) and low transaction costs.
Use of Smart Contracts
The transfer and movement of real-world assets require contracts and intermediaries, which increase transaction costs and reduce security. To solve these issues, MANTRA ecosystem uses smart contracts that automate processes, such as ownership transfer, compliance, and revenue distribution.
Interoperability
Currently, there are various blockchains operating in the crypto space and interoperability is one of the key requirements for the smooth functioning of any blockchain. MANTRA chain is built on the same principle which allows it to interact seamlessly with other blockchain networks.
Community Governance
MANTRA ecosystem follows a decentralized governance model, allowing the token holders to participate in the decision-making process which ensures transparency and community engagement in the development of RWA apps.
Why to Use MANTRA for RWA?
MANTRA is a blockchain built specifically for RWA tokenization blockchains. Below are several reasons to use it.
- Security: The MANTRA ecosystem focuses on a high level of security measures that protect the tokenized RWA assets from frauds and scams.
- Efficiency: The MANTRA chain processes transactions with high speed and low fees which make them cost efficient and user friendly.
- Transparency: The blockchain has an immutable ledger that ensures transparency in ownership and transaction records, thereby increasing trust among users.
- Scalability: The MANTRA chain is developed in such a manner that it can handle a high volume of transactions which make it suitable for mega RWA projects.
MANTRA’s Native OM Token
OM is the native currency for MANTRA ecosystem. It is used for various purposes such as staking in MANTRA’s Proof-of-stake (POS) mechanism. The token provides users with their governance rights, payment of transaction fees, integrations and many others. OM is available for trading on several leading exchanges including Binance, OKX, and KuCoin.
Use Cases of MANTRA
MANTRA has been developed focusing on regulatory compliance which provides a framework for users, developers, and regulators. The use cases of the MANTRA chain vary for developers, traders, and institutions.
Use Cases for Developers
Plug and Play Compliant Solutions
The MANTRA chain offers solutions to build and operate in a regulatory-compliant and transparent ecosystem with the MANTRA chain’s modular tech stack.
Multi-Chain Compatibility
The ecosystem uses Cosmos Inter-Blockchain Communication Protocol (IBC) which gives cross-chain interoperability. This feature helps developers to transact smoothly across multiple blockchains.
CosmWasm Integration
MANTRA integrates CosmWasm that helps developers to develop secure and efficient decentralized applications efficiently.
MANTRA Token Service (MTS) Module
The blockchain uses MTS software development kit (SDK) to create, issue, and manage tokenized assets on-chain.
Use Case for Traders
Transparency and Security
The use of on-chain transactions provides visibility of funds and the use of KYC, anti-money laundering (AML) screening, and smart contracts that help increase security.
OM Token Staking
OM is the native token of the MANTRA ecosystem and traders can earn extra rewards just by staking their OM token on MANTRA DEX.
Vaults
It is an upcoming feature of MANTRA that assists traders for better returns on USDC by providing exposure to specific assets.
Swapping
This feature of the blockchain refers to exchanging one crypto token for another.
Use Case for Institutions
RWA Tokenization
MANTRA offers an advanced RWA tokenization infrastructure that helps institutions to convert ownership of assets like art, commodities, and real estate into digital tradeable tokens.
Decentralized Identity (DID) System
MANTRA’s DID system supports users onboarding by providing a secure method for KYC/AML and enhancing the verification process.
On and Off-Ramping with Regulatory Compliance
MANTRA provides a platform that gives on-ramp and off-ramp compliant services for assets such as fiat currencies, equities, and tokenized securities.
On-chain Governance
The MANTRA ecosystem uses an on-chain governance model that helps institutions to participate in governance and also focuses on regular updates.
Conclusion
The popular MANTRA (OM) token project has witnessed a drastic downturn of over 90% within hours, losing $5 billion in market value. However, the MANTRA team has assured the investors and those sceptical of the project that a proper channel of communication will be set up in near future.
Despite an inherent trait of the crypto industry being highly volatile and unspeculative, such massive crashes are rare and definitely demands answers from both the developers and centralized exchanges in question.
Also Read: Trader Loses $3.3M on MANTRA (OM) as Its Price Crashes 90%
