MANTRA Team Explains Why OM Token Crashed, Proposes Way Forward

MANTRA, a decentralized finance layer-1 blockchain with OM as its native token, experienced a significant decline on April 13, 2025. The massive downward price action led to a 92% decline in one hour.

The unexpected turn of events has raised several questions and speculations within the MANTRA community about whether it was an insider manipulation. The crash wiped out approximately $6 billion from its market capitalization.

Following backlash from the investor community, the MANTRA team released a public statement addressing the recent token collapse and detailing its recovery roadmap.

The MANTRA team claimed the crash was triggered by a massive burn event on April 2, 2025, when a project-connected smart wallet eliminated over 84 million OM tokens ($524 million). Notably, 21.2 million of those tokens came from a DAO wallet designated for community staking rewards.

A Bullish Trend

Token burns are often considered bullish signals due to their deflationary impact on the circulating supply. In this instance, however, the execution was poorly timed, leading to insufficient communication and undermining its intended effect. The L1 blockchain noted that all of MANTRA’s Mainnet OM team and advisory allocation were locked at the time.

“The most important fact in this analysis is that there were no sales at all by the MANTRA team during this period of market distress. 100% of MANTRA’s Mainnet OM team and advisory allocation remain locked,” the project wrote.

Additionally, MANTRA stated that the original OM, based on the ERC-20 standard, was launched in August 2020 with a fixed total supply of 888.88 million tokens.  

99.995% OM Token Supply in Circulation

By April 15, 2025, roughly 99.995% of the OM token supply had entered public circulation, held by over 123,000 wallets. This means that they can be traded on the open market.

According to the report, the key allocation of the initial OM ERC-20 token allocations is distributed. This allocation involves public and private sales, team, and advisor incentives, grants, reserves, referrals, and staking rewards.

The team revealed that OM’s total supply is 1.81 billion tokens, evenly divided between the legacy ERC-20 and the new Mainnet OM. Currently, 53% of the total supply—approximately 969.61 million tokens—is in circulation.

The project added that approximately 92% of the circulating supply comes from fully liquid ERC-20 tokens, while the remaining 8% is sourced from Mainnet OM.

In response to the event, the L1 blockchain acknowledged that a substantial amount of OM tokens had been transferred to exchanges for use as collateral. Additionally, the team disclosed that forced closures of OM positions had occurred.

Ultimately, these liquidations created significant selling pressure on the OM token market. The timing of these forced liquidations caused the liquidations and collateral seizures to ramp up the selling pressure, pushing prices even lower.

MANTRA Proposes Way Forward

Following the announcement, the MANTRA team has proposed a recovery plan that will include a buyback and a supply burn program. John Patrick Mullin, the CEO of MANTRA, has also committed to burning his team allocation.

While the project offers a permissionless chain for tokenizing and trading real-world assets, its CEO said that it will launch a dashboard displaying live balances of tokenomics categories to enhance market transparency. Meanwhile, the team noted it is inviting its centralized exchange partners to assist in clarifying trading activities during this period.