Mantra’s OM token plummeted over 90%, collapsing from around $6.30 into the $0.70 range in just hours. This loss alone has cut off almost $5 billion from its market cap which presently sits at $696M. The team attributes this crash to “reckless” overnight forced liquidations of their losing positions by the centralized exchanges and investor skepticism grows as fears of a possible Ponzi scheme skyrocket.
OKX Exchange Press Release on Market Drop
According to a statement from OKX, the collapse had begun around 2: 28 AM UTC+8, triggered by fast pricing movements and then increased overall trading on other exchanges before that affected the market broadly.
They hint at structural problems with the token’s economic model, beyond what was evident last October 2024, which have been growing since then and destabilised the price of the exchange actively engages but suspect structural problems.
Forced Liquidations Mantra’s Decline
Within five minutes of the incident, Mantra co-founder JP Mullin had a response. He said the centralized exchanges are the ones to blame, not the company. He re-emphasized that the crash occurred during a time of very low liquidity on Sunday, which means much larger players might have been able to move the market.
According to Coinglass data, nearly $74.7 million worth of positions were liquidated in more than ten transactions each of at least $1 million.
Rug Pull Allegations
OM Token crash sparks anxiety of a potential “rug pull” from traders. What market commentators liked to compare with this event was the other crypto bottom from just a few weeks earlier that LUNA and FTX are good examples of.
AltcoinGordon, a well-known market observer, let his concerns slip away, saying the team needs to prove themselves innocent for the sake of credibility. In a punchline, Mullin took offence and said that their tokens are token-locked under vesting schedules to stave off investor fears of being wiped out.
The crash sent shivers up and down the crypto community, affecting other tokens as well. While the number of liquidations in other tokens was high, none of them hit as sharp a decline as OM token. The incident is a big red warning to all crypto investors, showing the wild tendencies of this industry.
