This crash is not just a singular event, but a microcosm of the structural contradictions between the 'decentralized ideal' and 'centralized reality'.
MANTRA is a DeFi platform based on Cosmos SDK, focusing on the tokenization of real-world assets (RWA), with its native token $OM achieving a 500x increase in one year.
1⃣ Crash Timeline:
- On March 20, community users detected that a large OM holder address withdrew funds and transferred them to an exchange, with rumors that OM had completed several large discounted OTC trades.
- Subsequently, multiple large OM holders began to sell off, leading to a continuous decline in the coin price, with many OTC buyers being trapped, causing panic within the community and prompting a rush to exit.
- In the early hours of April 14, the price of $OM plummeted from 6.2u to 0.4u, a drop of over 90%, with a market cap evaporating by $5.5 billion in 2 hours.
- On-chain data shows that at least 17 addresses transferred a total of 43.6 million OM to exchanges before the crash, with 2 addresses linked to strategic investor Laser Digital. (Suspected sell-off)
- The MANTRA team denied 'running away', stating that the crash was triggered by 'improper forced liquidations by other CEXs during low liquidity periods (Asian early morning)' and suspected negligence or market manipulation by the exchanges.
They also emphasized that the tokens are still locked and there has been no involvement of team or core investor sell-offs.
On-chain data also shows that during the crash, a large number of liquidation orders led to a chain reaction of sell-offs, with insufficient market depth exacerbating the decline.
2⃣ What issues were reflected in the OM event?
1) There is actually a power struggle between the project party and CEX.
A deep-seated contradiction is that CEXs are both liquidity providers and potential conflict of interest parties. For example, exchanges may earn fees through liquidations without being responsible for the project ecosystem.
MANTRA has repeatedly hinted that the project party lacks real leverage over CEXs, accusing them of abusing discretionary power.
CEXs allowing liquidations during inactive periods essentially shifts the risk onto retail investors.
It's like suddenly closing all emergency lanes on a highway at 3 AM; any stalled car will trigger a pile-up of hundreds of vehicles.
2) The 'valuation trap' of high FDV and low circulation projects.
OM's FDV/TVL ratio reached 730 times, far exceeding the industry's healthy level (usually below 50 times).
This extremely unhealthy metric indicates that OM's market value far exceeds its actual value support, making it susceptible to shorting or liquidation. The previously questioned smart money may have positioned itself for bearish sentiment + shorting + liquidation counter-attacks, waiting for emotional triggers, which indeed aligns with on-chain data.
Creating an illusion of scarcity through locking up funds attracts speculative capital to inflate market value, ultimately leaving retail investors to take the fall.
3⃣ What should we be wary of?
In the wake of the crash, the project party, CEX, and market makers all tried to shirk responsibility, but all three share the benefits of listing coins. There is a potential for collusion in the interest chain; could they jointly control the market and squeeze retail investors?
The dispersion of responsibility is, in itself, the best breeding ground for market manipulation.
CEXs, by controlling liquidity and liquidation rules, effectively hold the power to price tokens; liquidity equals power. Shouldn't they improve risk control mechanisms (like dynamically adjusting liquidation thresholds) to avoid regulatory vacuums to the greatest extent?
In this situation, retail investors inherently have an information disadvantage. The project parties should also consider how to avoid excessive reliance on centralized liquidity.
Projects that rely on 'unlock expectations' and 'ecosystem blueprints' for high valuations, once faced with a black swan event, will collapse much faster than traditional financial assets.
Narrative bubbles will eventually burst, and from one's own perspective, there are only two points:
1. Be wary of the 'FDV myth' and return to fundamental analysis. True value should be based on protocol income and user growth, not paper valuations.
2. Don't hold high-leverage positions during low liquidity periods; it will only prolong the inevitable.
