MANTRA once attracted the attention of many investors by taking advantage of the RWA and violent price manipulation. However, unexpectedly, a sudden price crash not only made MANTRA face the challenge of price fluctuations, but also exposed its "dark history", which was followed by a crisis of trust and a great test of governance.
OM crashed by nearly 90% late at night. The project owner, exchange, and investors all have their own explanations.
The collapse of OM's market value of tens of billions is caused by a market storm caused by the interweaving of multiple factors.
Just in the early morning of April 14, the price of MANTRA's OM token fell sharply. According to Coingecko data, OM plummeted 89.2% in the past 24 hours.
Regarding the flash crash of OM, MANTRA officials responded that the chaos was not caused by the team, MANTRA Chain Association, core consultants or investors selling tokens. The tokens are still in a locked state and are distributed according to the previously announced vesting period. The economic structure of the tokens has not changed. The official also reminded everyone not to click on any fraudulent links or fake MANTRA accounts.
At the same time, officials said that the flash crash occurred during a period of low liquidity, which may be due to negligence or market manipulation by the exchange. The magnitude and timing of the drop indicate that account positions were suddenly closed without warning. This incident occurred on Sunday night UTC, early morning Asian time, during a period of low liquidity, which seems to suggest that CEX has management loopholes or that market positioning may be intentional.
In a statement, Binance confirmed the recent sharp price fluctuations of OM and said that preliminary investigations showed that it was caused by "cross-exchange liquidation". Since October last year, Binance has taken risk control measures including reducing leverage, and has added risk pop-ups on the spot trading page of OM tokens since January this year to remind users that the token economics has undergone major adjustments and increased supply. Binance said it will continue to pay close attention to the situation and take appropriate actions to protect the integrity of users and the platform.
OKX also pointed out in the announcement that since October 2024, OM's token economic model has undergone major changes, and since March, multiple on-chain addresses have made large deposits and withdrawals on different exchanges. Based on market risks, OKX has adjusted the platform's risk control parameters and reminded users that the market has been volatile recently, and changes in token supply may cause sharp price fluctuations. OKX has also added a risk warning on the OM token page. OKX CEO Star even said that this is a major scandal for the entire crypto industry. All on-chain unlocking and recharge data has been made public, and the collateral and liquidation data of mainstream exchanges may be investigated. OKX has prepared all relevant reports.
Although MANTRA blames the exchange, on-chain data appears more complicated, and the community has begun to question potential insider selling and market manipulation.
According to Spot On Chain's monitoring data, 19 previously tracked wallets suspected to belong to the same entity transferred approximately 14.27 million OM (approximately $91 million) to OKX at an average price of $6.375 in the three days before OM collapsed. According to data from The Data Nerd, during these three days, 5 wallets deposited a total of 24.4 million OM (approximately $144 million) into OKX, of which 4 wallets had similar operating modes: withdrawing from Binance last month and then depositing into OKX, and the other wallet belonged to Laser Digital. Lookonchain's monitoring shows that since April 7, at least 17 wallet addresses have deposited a total of 43.6 million OM (worth approximately $227 million at the time) into the exchange, accounting for 4.5% of the circulating supply of OM. It is worth noting that five hours before the OM plunge, a wallet that had been silent for a year transferred 2 million OMs to the wallet of Shane Shin, the founding partner of Shorooq Partners, an investment institution suspected to be MANTRA. Although the transfer was worth US$12.58 million at the time, its value is now only US$1.57 million.
In response, Laser Digital, a strategic investor of MANTRA Chain, said that Laser had no connection with the recent price drop of OM, and that the comments on social media about Laser being "related to investor selling" were false and misleading. Laser did not deposit any OM tokens into OKX, and the wallet mentioned in connection with OKX was not Laser's wallet. In addition, Laser's OM investment is still locked, and it stated that it has no interest in putting pressure on the token or undermining the stability of the project, emphasizing the importance of transparency.
Investment institution Shorooq Partners also issued a statement to clarify that the decline was not caused by a hacker attack or team selling, but was triggered by large-scale forced liquidation, followed by panic selling during periods of low liquidity. Shorooq also emphasized that as a long-term equity investor, their position has not changed, and disclosed the relevant wallet addresses to prove their transparency.
The root cause of this plunge may be related to MANTRA's recent adjustments to the token economic model. MANTRA mentioned in a recent announcement that the community proposal decided to unify the OM token as the mainnet native token and abolish the original two-coin strategy, but this also brought technical challenges. Therefore, the team decided to abandon the original ERC-20 OM and establish OM as the standard version on the MANTRA Chain. At the same time, MANTRA also announced that it would increase the supply of OM from 888.8 million to 1.7777 billion, and introduced a 3% annual inflation rate to incentivize staking. Although the purpose of this move is to support ecological growth, the significantly increased circulation and unlimited inflation mechanism are considered by the market to have weakened investor confidence.
Although the price of OM has fallen sharply, the sell-off of tokens continues. The latest monitoring data from Onchain Lens (@OnchainLens) shows that the MANTRA DAO staking wallet recently transferred 38 million OM (about 26.96 million US dollars) to the Binance cold wallet.
It was involved in scam controversy in the early days, and the high degree of control and narrative trap behind the surge
MANTRA's predecessor, MANTRA DAO, was founded in 2020 and initially focused on staking, lending, and asset management services. However, MANTRA DAO was widely controversial in its early days because of its alleged scam. According to reports from Wu Blockchain and Fengchao Finance, the backgrounds of MANTRA DAO's core team and consultants are opaque and even suspected of identity fraud. The founder, Calvin Ng, has close ties with the online gambling site 21Pink, which casts doubt on the integrity of the project. Although the technology and functions of the project itself have not been implemented, MANTRA DAO has attracted a lot of investment through marketing methods and fake partnerships.
Not only that, MANTRA has also been caught in a vortex of litigation due to internal disputes. In early 2022, RioDeFi filed a lawsuit against MANTRA DAO, accusing it of ownership and management issues and even suspected asset misappropriation. RioDeFi said that it founded and developed MANTRA DAO in 2020, but after 2021, the core team of MANTRA DAO (including co-founder John Patrick Mullin and six others) stopped financial reporting, misappropriated assets without authorization, and controlled the entire project. MANTRA DAO responded that as a decentralized autonomous organization (DAO), it is governed by holders of OM tokens, not controlled by RioDeFi. The case was eventually intervened by the Hong Kong High Court in August 2024, and the court ordered key figures in MANTRA DAO to disclose financial records in response to allegations of asset misappropriation and unauthorized control. This case became the world's first judicial review of DAO ownership and governance.
In 2022, MANTRA DAO announced that it would officially change its name to MANTRA and began a brand reorganization, stating that it would transform from a decentralized autonomous organization (DAO) to a broader blockchain ecosystem. Since 2024, MANTRA has once again become the focus of the market due to the surge in OM tokens. According to Coingecko data, the price of OM once rose by more than 168.8 times in 2024 alone. According to DeFiLlama data, OM's fully diluted valuation (FDV) once reached US$15.39 billion in March this year, but has now fallen sharply to US$1.25 billion. In sharp contrast, since 2023, OM's total locked value (TVL) has remained low, always maintaining at the level of hundreds of thousands of dollars.
Simply put, there are two main reasons for the rise of OM coin: one is that the project party has very concentrated control over the coin, and the other is the rise of the emerging concept of RWA (tokenization of real assets).
First, according to crypto analyst Mosi, the MANTRA team controls 90% of the OM coin circulation, and only 5% of the OM coin can actually circulate in the market. This means that there are very few OM coins actually circulating in the market, so its price is more likely to fluctuate, the market is seriously controlled, and the liquidity is very poor.
Moreover, this highly controlled strategy has potential risks behind it. Rui of HashKey Capital revealed that MANTRA is actually a local OTC market, and the OTC market has traded at least $500 million in the past two years. These funds are circulated in the form of "new OTC tokens to take over old OTC selling orders", until the last part of the tokens is unlocked, and the OTC market is completely motionless, which becomes a time bomb.
On the other hand, MANTRA has also been active in the RWA track. It has not only set up an ecological fund of US$109 million, but also cooperated with the UAE's DAMAC Group to tokenize assets worth US$1 billion, and even introduced Google as a partner to carry out some cooperative projects. These have provided impetus for MANTRA's growth and attracted a lot of attention.
In particular, the involvement of Middle Eastern capital has become the key to the development of MANTRA. According to Ye Su of ArkStream Capital, in 2023, when the valuation of OM coin almost hit the bottom, a Middle Eastern capital took over the project through an intermediary and retained the position of CEO. This capital owns a large number of physical assets such as luxury homes and resorts, and then packaged OM into a physical asset tokenization project, thereby pushing OM to a larger market. Ye Su mentioned that under this highly controlled strategy, the price of OM increased 200 times in 2024.
However, MANTRA has also undergone many changes in its top management, including the departure of its CEO and CTO, and recently announced that it had received $11 million in funding from Shorooq Partners, an influential investment firm in the Middle East and North Africa, while MANTRA plans to launch an incubator in Dubai that focuses on RWA tokenization projects.
In general, there are many controversies behind the rise of MANTRA. Multiple factors such as the controlled token economy, the behind-the-scenes manipulation of capital, and the rise of the RWA concept have jointly promoted this situation. Although it was once optimistic, it also left many risks.
