Mantra (OM) Token Crash: Causes, Consequences, and Recovery Plan
On April 13, 2025, the Mantra (OM) token lost over 90% of its value in less than an hour, plummeting from $6.33 to $0.38. This wiped out more than $6 billion in market capitalization and triggered investor panic, reminiscent of the Terra (LUNA) collapse in 2022.The Scale of the Crash: $6 Billion in One Hour
Root Causes: Liquidations and Insider Trading Allegations
According to Mantra CEO John Mullin, the crash was caused by “reckless liquidations” on centralized exchanges during a period of low liquidity. He emphasized that the project team, advisors, and investors did not sell tokens and that all their holdings remain locked under the vesting schedule.
However, the community raised suspicions of insider trading. Analyst ZachXBT reported that some venture investors, including the founder of Reef Finance, allegedly used OM as collateral to secure loans shortly before the crash.
Crisis Plan: Token Buybacks and Burns
In response to the collapse, the Mantra team is developing a recovery plan that includes:
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Buying back OM tokens from the market to support price and reduce supply
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Burning a portion of tokens to shrink the circulating supply and boost investor confidence
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Utilizing a $109 million fund to support the ecosystem and implement the recovery plan
Mullin noted that these measures are still in the early stages, but restoring OM’s value is a top priority.
Transparency and Refuting Accusations
The Mantra team released a report detailing token distribution to counter allegations that they control 90% of the supply. Mullin stated that these claims are baseless and clarified that Binance is the largest holder of OM.
Current Status and Outlook
After the crash, the OM price rebounded slightly and is now trading around $0.62—still far below its peak of $6.30. Future recovery will depend on the successful execution of the crisis plan and restoration of investor trust.
The situation with Mantra (OM) highlights the importance of transparency, investor protection mechanisms, and solid risk management in crypto projects. The effectiveness of the recovery plan and the team’s ability to regain community trust will be critical to the future of OM and the broader Mantra ecosystem.
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