Mantra Token Crashes by 90% – What’s Behind the Dramatic Collapse

On Sunday, the Mantra token ($OM) experienced one of the most severe price drops of the year. Within just one hour, the price plummeted from just under $6 to under $0.40—a drop of over 90% that wiped billions off its market capitalization.

“Reckless liquidations” as a trigger

According to Mantra co-founder John Patrick Mullin, the project itself was not involved in the crash. On X (formerly Twitter), he explained that the price drop was triggered by “forced liquidations without prior margin calls”—automated sales on centralized exchanges during a period of low liquidity.

In an official statement, Mantra blamed “reckless liquidations” for the incident – ​​not a platform failure or an insider dump.

Rug pull or technical failure?

Rumors of a possible rug pull were quickly dismissed. The team’s token allocations are locked and transparently visible on the blockchain. Data from Arkham Intelligence also shows that approximately 21 million OM tokens were burned by Mantra DAO on April 2nd – which speaks to an active community and transparent token policy.

A setback for the RWA sector

Mantra is considered a pioneer in real-world asset (RWA) tokenization. Its Layer 1 blockchain is based on the Cosmos SDK, is IBC compatible, and supports CosmWasm—making it technically sound. However, such a severe crash could severely undermine the confidence of institutional partners, including Google Cloud and Dubai’s DAMAC Group.

Crisis of confidence after the Mantra token crash

Industry experts like Hank Huang of Kronos Research see the incident as a symptom of structural weaknesses: “The RWA industry is still in its infancy. It lacks robust, transparent, and regulatory-compliant structures.”

John Mullin also emphasized: “When decisions are made without adequate oversight, this is precisely what creates market distortions – to the detriment of everyone involved.”

Conclusion: Trust needs more than technology

The Mantra case demonstrates that even technically strong projects are not immune to market risks and malfunctions. In an environment of increasing regulation and institutional interest, it will be crucial to improve processes, minimize liquidity risks, and regain investor confidence in the long term.

__

(Featured image by Adam Nowakowski via Unsplash)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in BLOCK-BUILDERS.DE. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us