OM Token Price Struggles Below $0.70 as Chaos of 90% Collapse Lingers

Mantra's OM token is currently hovering above $0.64, down by over 8.5% in the past 24 hours, as the project continues to grapple with the

Mantra's OM token price is currently struggling below the $0.70 level as the project continues to grapple with the chaos of a 90% collapse that saw billions of dollars in market capitalization evaporate.

What Happened: The disaster unfolded on April 13 between 18:00 and 20:00 UTC as OM's price fell from $5.52 to as low as $0.52 without any apparent reason. Social media buzzed with theories ranging from exchange manipulation to rug pull claims.

As fear grew, Mantra CEO John Patrick Mullin said in a statement that "reckless forced closures initiated by centralized exchanges on OM account holders" caused the catastrophe.

"The timing of this event, during low-liquidity hours on a Sunday evening, speaks to a degree of negligence at least, or possibly intentional market positioning taken by centralized exchanges," Mullin stated.

On-Chain Analysis: Single Trader Might Have Controlled Crash

New blockchain research points to one trader who might have been able to control the crash. Reports indicate that the first trigger was likely a $1 million short bet on Binance's perpetuals market, resulting in more than 5% slippage "in literal microseconds."

This trader reportedly kept dumping short positions at five-second intervals, triggering a chain reaction on other exchanges.

Later, blockchain tracker Lookonchain found 17 accounts where 43.6 million OM tokens, valued at approximately $227 million, had been deposited into Binance and OKX prior to the crash, fueling speculation about insider trading.

Mantra's Liquidity Illusion Exposed

Industry analysts believe that Mantra and related market builders might have inflated OM token liquidity numbers by utilizing weaknesses in the self-reporting systems of data aggregators.

"This was a token that appeared to be a top-25 asset by market capitalization despite less than 1% of the token supply being genuinely liquid," stated on-chain observers during a discussion on The Chopping Block podcast.

"This involved misrepresenting circulating supply and trading volume to create the appearance of broader market activity." The implication is that the artificially maintained liquidity withered away when a large holder attempted to sell.

Early Warning Signs Ignored

Three days before the disaster, hedgeye digital assets specialist Ishmael Asad warned Mantra about vulnerabilities.

Asad noted how Mantra had silently quadrupled its token supply after migrating from Ethereum to its own L1 chain, highlighting concerning tokenomics as early as November 2024.

"They literally doubled the supply," Asad said in a post-crash interview with Coinage. "And out of that new supply... they kept a major chunk of that as well for core contributors, seed funding and ecosystem development grants."

Both the Mantra community and Mullin responded to Asad's warnings with amusement.

"I was definitely caught off guard by the hahas in front of all of his responses and sort of just the sheer arrogance," Asad added.

Mantra (OM) Recovery Plans Unclear

Since then, Mantra has released a "statement of events," emphasizing that all team allocations remain frozen and no project-led token sales had taken place.

While the team has mentioned plans for a token buyback and burn program, they have provided minimal details about the timing or execution.

Beginning with his personal allocation, Mullin stated that he would burn all of his team's tokens. Additionally, an unidentified blockchain analyst is allegedly involved in the initiative to examine the fundamental cause of the disaster.

Industry Implications and Proposed Solutions

The OM crash has sparked fresh discussion about the fragility of crypto assets with artificially generated liquidity.

Noting the implications of token concentration and opaque governance, Bitget CEO Gracy Chen highlighted that the meltdown "exposed several critical issues" within the industry.

Industry leaders have proposed various solutions to prevent such events, including mandating disclosure of all market-making agreements as a requirement for listing tokens on major exchanges and applying increased scrutiny of token distribution claims.

Many observers remain skeptical about Mantra's chances for recovery as it seeks to rebuild its reputation.

Asad stated, "I personally would stay away from this one because of permanent reputation damage, but maybe at this current price it’s more fitting to what’s actually happening on the chain. But at $9, that was [too early] and it was not justified."

See More: Top 5 DeFi Tokens To Watch In April 2025

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