OM token experienced a dramatic and unexpected price crash, plummeting approximately 92% within about one hour, from around $6.30 to below $0.50. This unprecedented market event triggered widespread concern and speculation within the OM community and the broader crypto ecosystem.
Key Findings from MANTRA’s Investigation
The MANTRA team has been actively investigating the incident to clarify the causes behind the sharp price decline and to reassure token holders. A critical point emphasized by the team is that no sales of OM tokens were made by the MANTRA team during this period of market distress. All team and advisory allocations on the MANTRA Chain Mainnet remain fully locked, and the tokens involved in the crash were primarily legacy ERC-20 OM tokens circulating publicly on the open market, outside the team’s control.
Circulating Supply Breakdown
- Legacy ERC-20 OM Tokens: Launched in August 2020 with a fixed supply of 888.88 million tokens, nearly 99.995% of these tokens are in public circulation, held across more than 123,000 wallets. These tokens are fully liquid and tradeable, and market dynamics here are driven by external holders.
- MANTRA Chain Mainnet OM Tokens: Introduced in October 2024, with an equal supply of 888.88 million tokens minted natively, but only about 77.5 million (8% of total circulating supply) are currently in circulation, with team and advisor tokens locked.
- Combined Supply Total OM supply stands at approximately 1.81 billion tokens, with 53% (around 969.61 million) circulating. The vast majority (92%) of liquid tokens belong to the ERC-20 legacy supply, which was the primary market segment affected.
Causes of the Price Collapse
The investigation points to a cascade of forced liquidations during a period of low market activity as the main driver of the crash:
1. Forced Liquidations: Large amounts of OM tokens were moved onto exchanges and used as collateral. When market conditions deteriorated, forced position closures triggered massive sell-offs.
2. Low Liquidity Period: These liquidations occurred during historically low trading volume hours (around 02:00 am HKT), which exacerbated the price impact due to insufficient buyers to absorb the sell pressure.
3. Self-Reinforcing Market Cycle: Initial forced sales pushed prices down, triggering automated liquidations of leveraged positions across exchanges, which in turn generated further selling pressure and a sharp price decline.
4. Price Divergence Between Exchanges: A notable divergence in OM’s spot price between major exchanges OKX and Binance was observed during the crash, reflecting fragmented liquidity and market stress.
Community Concerns and Team Response
Despite rumors and speculation—including allegations of insider dumping or market manipulation—the MANTRA team has firmly denied any involvement in selling during the crash period. The team remains fully operational and committed to transparency, promising ongoing updates and corrective measures such as token buybacks and burns to restore confidence.
The incident highlights vulnerabilities in crypto markets related to leverage, liquidity risks, and the challenges posed by large token holders during periods of market stress. Analysts advise investors to carefully assess tokenomics, vesting schedules, and on-chain data to better understand potential risks.
Outlook
While the OM token’s price collapse erased over $5 billion in market capitalization and shook investor confidence, the MANTRA team’s swift investigation and commitment to transparency aim to stabilize the market and rebuild trust. The event serves as a cautionary tale about the impact of forced liquidations and liquidity shortages in crypto markets, underscoring the need for robust risk management.
This comprehensive analysis clarifies that the OM token’s sharp price drop on April 13, 2025, was primarily driven by forced liquidations of publicly circulating ERC-20 tokens during low liquidity periods, with no sales from the MANTRA team itself. The team continues to engage with the community and implement measures to enhance market resilience going forward.
