Why did the Mantra token crash by over 90% in a single day?

**Why Did the Mantra Token Crash by Over 90% in a Single Day?**

The cryptocurrency market is no stranger to volatility, but few events are as shocking as the sudden collapse of a major token. On April 13, 2025, the Mantra (OM) token experienced one of the most dramatic crashes in crypto history, plummeting over 90% in under an hour and wiping out more than $5.5 billion in market capitalization. This catastrophic event has drawn comparisons to the infamous Terra LUNA crash of 2022 and has left investors scrambling for answers.

### The Immediate Trigger: A Suspicious Token Deposit

The crash appears to have been triggered by a large token deposit linked to a wallet allegedly associated with the Mantra team. Onchain data revealed that 3.9 million OM tokens were deposited into the OKX exchange just before the price collapse. This move immediately raised red flags, as such a large transfer often signals an impending sell-off. Given that the Mantra team reportedly controls close to 90% of the token’s total supply, the deposit fueled fears of insider dumping—a scenario where team members or early investors offload their holdings en masse, causing a price crash.

### Underlying Issues: Lack of Transparency and Alleged Manipulation

While the token deposit may have been the immediate catalyst, the crash was the culmination of long-standing concerns within the OM community. Over the past year, investors had raised alarms about the project’s lack of transparency, including:

1. **Price Manipulation Accusations** – The Mantra team has been accused of artificially inflating the token’s price through market makers, creating an illusion of demand before the eventual collapse.
2. **Tokenomics Changes** – Sudden and unexplained alterations to OM’s tokenomics left investors uneasy, as such changes can disproportionately benefit insiders.
3. **Delayed Airdrops** – Repeated delays in promised community airdrops eroded trust, with some speculating that the team was hoarding tokens for themselves.
4. **Undisclosed OTC Deals** – Reports suggest that Mantra engaged in secret over-the-counter (OTC) sales, offering tokens at steep discounts (up to 50% below market price). When these OTC buyers dumped their holdings, it triggered panic selling, stop-loss orders, and leveraged liquidations—accelerating the crash.

### The Aftermath: Denials, Investigations, and Community Outrage

In the wake of the crash, the Mantra team denied allegations of a rug pull, insisting that they did not initiate the sell-off. Co-founder John Patrick Mullin stated that the team was investigating the incident and working on a resolution. However, skepticism remains high, especially after the project’s official Telegram channel was locked during the crisis—further fueling suspicions of foul play.

Centralized exchanges also came under scrutiny, as some reportedly closed OM positions without sufficient warning, exacerbating the downward spiral. The lack of communication from both the team and exchanges deepened the panic, leaving retail investors with massive losses.

### Potential Fallout and Lessons for Crypto Investors

If the OM token fails to recover, this event will go down as one of the largest crypto collapses since Terra LUNA. Beyond the financial losses, the crash underscores critical lessons for the crypto industry:

1. **The Dangers of Centralized Token Distribution** – When a small group controls the majority of a token’s supply, the risk of manipulation and sudden crashes increases dramatically.
2. **The Need for Transparency** – Projects that fail to provide clear, timely communication risk losing community trust—often with catastrophic consequences.
3. **The Risks of Leverage and Stop-Loss Orders** – In highly volatile markets, cascading liquidations can turn a sell-off into a full-blown collapse.

### Conclusion

The Mantra token crash serves as a stark reminder of the risks inherent in cryptocurrency investments, particularly in projects with opaque governance and concentrated token ownership. While the team’s investigation may provide some answers, the damage to investor confidence may be irreversible. For now, the broader crypto community watches closely, awaiting accountability—and hoping that such disasters can be prevented in the future.