What Led to the Collapse of Mantra OM?

On April 13, the Mantra OM token—the native cryptocurrency of the Mantra blockchain—suffered one of the sharpest single-day collapses in crypto history.

OM fell from around $6.3 to just $0.36, wiping out more than 90% of its $6 billion market cap. Within hours, a token that once symbolized the promise of real-world asset (RWA) tokenization was being compared to infamous failures like Terra Luna and FTX.

At the time of writing, OM has bounced slightly to just over $0.75. 

What is Mantra and OM?

Mantra is a tokenization platform built to bring real-world assets—like real estate, data centers, and physical commodities—on-chain. It aims to simplify asset management, improve access, and create global liquidity through blockchain. Its native token, OM, plays a central role in governance, staking, and network participation.

Mantra gained traction earlier this year when it secured a $1 billion tokenization deal with Dubai’s DAMAC Group. The project also became the first DeFi protocol licensed by Dubai’s Virtual Assets Regulatory Authority (VARA), making it a major name in the growing RWA ecosystem.

That makes OM’s collapse even more surprising.

Rug Pull or Liquidation Chaos?

The crypto community was quick to speculate. Some traders claimed it was an outright rug pull, accusing insiders of dumping tokens behind closed doors.

Investor Gordon went as far as calling it the “biggest rug pull since LUNA/FTX.”

But Mantra’s co-founder and CEO, John Patrick Mullin, denied any foul play. In an official statement, Mullin said that "reckless forced closures" by centralized exchanges (CEXs) were to blame—not the Mantra team.

“This dislocation was not caused by the team, the MANTRA Chain Association, its core advisors, or MANTRA’s investors,” Mullin posted on X (formerly Twitter).

He claimed that several OM account positions were suddenly liquidated during low liquidity hours on Sunday evening UTC—early morning in Asia. This, he said, created a cascading sell-off that crushed the token’s price.

Without naming platforms, Mullin criticized CEXs for having too much control and too little oversight. He warned that such unchecked power could trigger “dislocations” that hurt investors and projects alike.

Questions Still Unanswered

Despite the response, the explanation left many unconvinced.

Some users highlighted the absence of a clear cause. Others pointed to missing communication from the team in the hours immediately following the crash. 

On-chain analyst ZachXBT voiced skepticism, questioning the lack of transparency and clarity.

“What kind of statement is this? OM went down 90%+ in a single candle,” he wrote.

Investors began drawing parallels with the 2022 Terra Luna crash, which similarly wiped out billions. Some are even calling for legal action, accusing the Mantra team of negligence or worse.

Binance and OKX Respond

The broader industry took notice. Binance issued a statement confirming that OM had seen “significant price volatility”, which their internal checks linked to cross-exchange liquidations. Binance also clarified that risk controls like reduced leverage had been in place since October.

Binance founder CZ weighed in, stating that user activity—not listings—should determine a token’s credibility. He suggested that measuring real user engagement is a strong signal of a project’s viability.

Meanwhile, OKX CEO Star called the OM collapse a “major scandal” and promised to release relevant on-chain data, including unlock schedules and collateral records.

What About Mantra’s Tokenomics?

In his defense, Mullin said OM’s tokenomics haven’t changed. All team and investor tokens remain locked under vesting schedules, and no unauthorized token movements have occurred. Per reports, earlier a verification wallet address was shared publicly.

The OM token had soared as high as $9 earlier this year, driven by hype around real-world asset tokenization and regulatory wins in the UAE. But critics now ask whether the fundamentals were ever as strong as advertised.

Is This the End for OM?

It’s too early to say.

The Mantra team insists it’s “not going anywhere” and has scheduled a community discussion on X to address concerns. 

Mantra has also promised a detailed investigation and further transparency. Whether that will be enough to calm investors and repair its reputation remains to be seen.

Beyond the OM token itself, this event points to a broader problem facing DeFi and tokenization projects: liquidity risk, central exchange exposure, and opaque operations.

Mantra’s fall joins a growing list of high-profile collapses and hacks in early 2025. In the same quarter:

• The Libra memecoin lost nearly all its value
• The Bybit hack resulted in $1.4 billion in losses
• Multiple DeFi protocols suffered smart contract exploits and liquidity attacks.

DeFi promises decentralization—but when key tokens still depend on CEXs for volume, centralized forces can wreak havoc. 

In an industry where billions can vanish in hours, accountability and open communication are everything.