Mantra (OM) Token Crash Leaves 90% of the Market Value Erased

Mantra's OM token is currently holding around $0.60, down by over 24% in the past 24 hours, as the project's leadership addresses concerns

Mantra’s OM token is showing signs of recovery after plummeting over 90% from its all-time high of $7 to hit lows of $0.37 last week, in one of crypto’s most dramatic price collapses in recent memory.

The token, which is currently trading at around $0.60, saw approximately $5.4 billion in market value wiped out when it crashed, sparking comparisons to the 2022 Terra LUNA collapse.

The fall seems to have resulted from structural flaws in OM’s token economy. On-chain analysis suggests that the Mantra team allegedly controlled up to 90% of the token supply, leaving only 10-20% circulating freely on the market.

This concentration created the conditions for a liquidity crisis when significant selling pressure began. In the days leading up to the meltdown, about 17 wallets—which hold around 4.5% of the circulating supply—transferred 43.6 million OM tokens (value roughly $227 billion) to exchanges, according to data from blockchain analytics company Arkham.

This unexpected token flood overwhelmed the rather thin order books, setting off a chain of forced liquidations that amounted to nearly $67 billion in just 12 hours.

“Control the supply, control the narrative—until it breaks,” said Head of Research Alice Liu of CoinMarketCap, explaining how Mantra’s strict control of token distribution created an “artificial illusion” of power that ultimately proved unsustainable.

Mantra CEO John Patrick Mullin answered questions and addressed claims of insider trading in an Ask Me Anything (AMA) session sponsored by Cointelegraph on April 14.

Rejecting claims that the team or its investors sold tokens ahead of the crash, Mullin said, “The Mantra association, our key investors, our advisors—no one has sold.”

He also addressed claims that Mantra controls 90% of the token supply, adding that it was covered in a community transparency report published the week prior.

However, Mullin said the meltdown began from an unidentified exchange that sold positions and used OM tokens as collateral when market conditions changed.

“What happened was basically the exchange took the collateral and started selling, which caused a cascade of sell pressure and forced more liquidations,” he said.

Strategic investors in Mantra have been quick to distance themselves from the downturn.

Laser Digital, a trading company based in Switzerland and part of the Nomura Group, issued a statement denying any involvement in the crash.

The company said on X (formerly Twitter), disclosing wallet addresses showing no deposit or selling activity, “Assertions circulating on social media that link Laser to ‘investor selling’ are factually incorrect and misleading”

Similar issues had been raised regarding another major investor, Shorooq Partners. A wallet linked to Shorooq’s Shane Shin received an OM token transfer ahead of the crash, with Shin denying selling the tokens and explaining that it was a wallet-to-wallet transaction rather than a sale to an exchange.

Recovery efforts are in ‘early stages’

Although Mullin emphasized that recovering the OM token is the company’s “preeminent and primary concern,” strategies are still under development.

Token buybacks and burns could be among possible actions, but specific details are yet to be disclosed.

“We are still in the early stages of developing this strategy for possible token buyback during the AMA session,” said Mullin.

To assist with recovery initiatives, the company also plans to utilize its newly announced $109 billion Mantra Ecosystem Fund (MEF).

Launched on April 7 in partnership with strategic investors including Laser Digital and Shorooq Partners, the fund comprises OM tokens and monetary commitments.

Technically, OM has shown some resilience following the initial decline, rebounding from its low of $0.37 to momentarily touch $1.10—a 200% bounce—before settling to current levels around $0.59.

After the crash, the Relative Strength Index (RSI) reached very oversold levels—a technical indicator that can sometimes precede reversals.

Market watchers cite several factors that can aid OM’s recovery:

However, major hurdles remain, including restoring trust in the tokenomics and transparency of the project.

The exceptionally high supply concentration that led to the meltdown raises questions about Mantra’s token distribution strategy and governance structure going forward.

“Hope rises like a phoenix from the ashes of shattered dreams,” remarked one market participant, but whether OM can truly embody this phoenix-like recovery remains to be seen as investors keenly observe the project’s response to this disaster.