Mantra’s OM Token Crashes 90%: Alleged Forced Liquidations Spark Industry Uproar
A Sudden Collapse That Shocked the Crypto World
In a dramatic turn of events, Mantra’s OM token plunged over 90% within just a few hours, sending shockwaves through the cryptocurrency market and raising serious concerns about the role of centralized exchanges (CEXs) in token price volatility.
The token, which had recently crossed the $6 mark, plummeted to a shocking low of $0.40 between late Sunday and early Monday—wiping out millions in market value and leaving investors rattled. The unexpected crash comes at a time when Mantra’s real-world asset (RWA) strategy had been gaining significant momentum across DeFi circles.
Mantra Team Responds: “This Was Not a Fundamental Flaw”
In an urgent public statement, John Patrick Mullin, co-founder of Mantra, claimed that the crash was not due to any underlying weakness in the project itself. Instead, he blamed the nosedive on reckless forced liquidations triggered by centralized trading platforms during a thin liquidity window.
“There were no cracks in our ecosystem,” Mullin said. “This was purely the result of artificial pressure caused by exchanges mismanaging risk and open interest.”
According to Mullin, over $50 million in OM positions were forcibly closed, and open interest on OM contracts plunged from $345 million to approximately $130 million within hours.
Anatomy of the Crash: Timing and Liquidity Risks
The crash unfolded during an off-peak trading period, when the market is typically quieter and more vulnerable to price manipulation. During such windows, even moderate sell pressure can lead to extreme volatility—especially on tokens with elevated open interest and margin exposure.
Critics argue that CEXs failed to uphold investor protections, instead liquidating positions en masse with little warning. These actions exacerbated the situation, triggering a domino effect of margin calls and automated liquidations.
Skepticism Mounts: Was the Crash Orchestrated?
Not everyone is buying the Mantra team’s explanation. Star Xu, founder of major exchange OKX, weighed in shortly after the event, revealing that more than $220 million worth of OM tokens were transferred to exchanges just before the price collapsed.
“It’s a serious issue,” Xu noted on X (formerly Twitter). “We will conduct a full investigation and make our findings public.”
His remarks have raised red flags across the industry, with some suggesting possible insider manipulation or orchestrated sell-offs, although no direct evidence has yet been disclosed.
Repercussions for Real-World Asset Projects and CEX Trust
The OM crash could have broader implications beyond the token itself. Mantra has positioned itself as a key player in the real-world asset (RWA) integration space, offering infrastructure for tokenizing physical assets like real estate and government bonds. The incident may dampen institutional confidence in similar RWA ventures—many of which are already struggling with trust and transparency concerns.
Moreover, the crash renews scrutiny on the power held by centralized exchanges in determining the fate of tokens listed on their platforms. As more projects explore decentralized alternatives, events like this could accelerate the push toward decentralized risk management and autonomous liquidation protocols.
What Comes Next: Investigations, Recovery, and Regulation
As the dust settles, all eyes are on how exchanges and Mantra will respond. Market watchers are awaiting:
- Transparency reports from exchanges involved in the forced liquidations.
- Audit trails of major token transfers leading up to the crash.
- Investor support mechanisms for those affected by the sudden wipeout.
- Potential regulatory reactions, particularly concerning market manipulation and liquidity mismanagement.
Final Thoughts: A Cautionary Tale in a High-Stakes Market
The fall of OM from $6 to under $0.50 serves as a sobering reminder that even the most promising tokens remain vulnerable to systemic risks, especially when centralized actors hold critical control points.
While Mantra asserts that its fundamentals are intact, the path to rebuilding investor trust may be long and uncertain. As the crypto community calls for accountability, the OM episode may well go down as one of the most defining cautionary tales in the 2025 DeFi landscape.
