Mantra (OM) Token Price Crash Fuels 500% Surge in Total Value Locked (TVL)

After the catastrophic 93% price crash in MANTRA (OM) token price, the total value locked (TVL) on Mantra's RWA-focused blockchain protocol has surged by over 500%

After a 93% price crash wiped out nearly all of MANTRA (OM) token gains this year, the total value locked (TVL) on Mantra’s RWA-focused blockchain protocol surged by over 500% within just two days.

After a 93% price crash wiped out nearly all of MANTRA (OM) token gains this year, the total value locked (TVL) on Mantra’s RWA-focused blockchain protocol surged by over 500% within just two days.

Data from DeFillama shows that Mantra’s TVL rose 544% and reached 4.21 million OM (approximately $3.24 million) in a sudden spike on Friday as investors rushed to buy OM token at a discount price and stake it on the protocol.

The spike in TVL came amid market chaos as OM’s price plummeted to weekend lows due to what the Mantra team described as “reckless forced liquidations” executed by centralized exchanges.

The spike in TVL came amid market chaos as OM’s price plummeted to weekend lows due to what the Mantra team described as “reckless forced liquidations” executed by centralized exchanges.

After reaching a 24-hour high of $9.1 on Friday, OM token dropped to as low as $0.78 on Saturday before recovering to $0.89 by Sunday evening. A portion of the downturn was driven by a large-scale liquidation on crypto exchange OKX, where several traders who had leveraged long positions on OM were liquidated in quick succession.

The Mantra team took note of the incident and stated that it appeared to be a deliberate attempt to destabilize the token price through rapid liquidations. In a statement on X, the team said: “It is truly concerning to witness the blatant disregard for market stability displayed by certain centralized exchanges.”

The Mantra team also pointed out that the rapid liquidations seemed designed to devalue OM token and create a vicious cycle of price declines.

However, despite the setback, OM’s price showed signs of recovery on Sunday evening as it began trading above the $1 mark. By Sunday evening, OM had recovered around 170% from Saturday’s lows, rising from $0.78 to $0.99.

The sharp buying activity and the timing of the spike in Mantra’s TVL suggests that investors viewed OM price collapse as a rare opportunity to enter the ecosystem at a discount.

The sharp buying activity and the timing of the spike in Mantra’s TVL suggests that investors viewed OM price collapse as a rare opportunity to enter the ecosystem at a discount.

A prominent crypto analyst aliased Dom highlighted in one of his recent posts that over $35 million of OM tokens were purchased in aggressive buying while its price was bottoming with 90% downside. This points to a tactical accumulation likely orchestrated by whales or opportunistic traders.

After playing with the $OM trade data for hours, there is one thing that is very odd

After playing with the $OM trade data for hours, there is one thing that is very odd

The spot market never saw any aggressive panic. They did the opposite when combining data from OKX, Bybit and Binance

There was over 35M USD of $OM purchased within the 2 hour window of the… https://t.co/uTALfk0gQz pic.twitter.com/Kx0k71SKlS

— Dom (@Dom_Crypt) August 27, 2023

The growth in TVL typically reflects increased user engagement with a protocol – such as staking, yield farming, or liquidity provisioning.

The growth in TVL typically reflects increased user engagement with a protocol – such as staking, yield farming, or liquidity provisioning.

Although nearly 97% of Mantra’s TVL increase comes into Mantra Swap, the native decentralized exchange of the protocol. Its automated market-making pools locked in 4.11 million OM in 2 days and made it the primary driver behind the protocol’s rising TVL.

Although nearly 97% of Mantra’s TVL increase comes into Mantra Swap, the native decentralized exchange of the protocol. Its automated market-making pools locked in 4.11 million OM in 2 days and made it the primary driver behind the protocol’s rising TVL.

Despite the sharp TVL rise and price rebound – OM recovered by around 170% to hit $0.99, analyst notes that the red-flags over the protocol still remain active. The current fully diluted valuation (FDV) for Mantra stands at $1.88 billion which vastly outpaces its real TVL. This translates to only 0.17% of the FDV being actively deployed in the ecosystem, signaling poor capital efficiency and potential overvaluation.

Despite the sharp TVL rise and price rebound – OM recovered by around 170% to hit $0.99, analyst notes that the red-flags over the protocol still remain active. The current fully diluted valuation (FDV) for Mantra stands at $1.88 billion which vastly outpaces its real TVL. This translates to only 0.17% of the FDV being actively deployed in the ecosystem, signaling poor capital efficiency and potential overvaluation.