Mantra Plummets 93%, Loses $5 Billion of Market Cap in 20 Minutes

Mantra, a real-world asset (RWA) Layer 1 blockchain, shockingly dropped by more than 90% in a matter of minutes on Sunday afternoon, with seemingly no explanation and no immediate communications.

The OM token went into freefall shortly after 2 pm EST, plunging from $5.5 to a low of $0.35. OM has since recovered slightly and currently trades at $0.69 per token, an 88% drop over the past 24 hours.

The Mantra team did not address the situation for more than 2 hours, and many were quick to point the finger at Mantra as a multi-billion dollar rug pull.

Mantra’s co-founder JP Mullin addressed the situation first on X, saying, “We have determined that the OM market movements were triggered by reckless forced closures initiated by centralized exchanges on OM account holders. The timing and depth of the crash suggest that a very sudden closure of account positions was initiated without sufficient warning or notice.”

“This happened during low-liquidity hours on a Sunday evening UTC (early morning Asia time) points to a degree of negligence at best, or possibly intentional market positioning taken by centralized exchanges.” Mullin continued.

There has been minimal information released as to which centralized exchanges the token dumping took place on and how many unsuspecting holders were forced into liquidations.

Controversial Past

Before pivoting to RWAs, Mantra was formerly MantraDAO, launched via the controversial Polkadot parachain launchpad, Polkastarter.

“The problem is that Polkastarter basically just mooched on the Polkadot branding for a long time and has a sordid history of IDOing pointless rug projects…with basically none of them actually ever becoming DOT parachains,” said ICO Beast, a trader and influencer.

He also highlighted the chain’s lack of total value locked (TVL) despite its large valuation. Mantra maintains just $4.25 million in TVL, with more than 50% of that TVL being stablecoins, despite previously trading as high as an $8.5 billion market capitalization.

It is unclear whether onchain sleuth ZachXBT is officially investigating or just commenting on the matter. Still, he responded to a publication regarding the incident and said, “The two names I keep hearing tied to the Mantra incident are Denko (Reef Finance founder) and Fukogoryushu as they had allegedly been reaching out to a number of people asking for massive loans against their OM in the days leading up to the -90% crash.”“REEF had similar market manipulation incidents in the past before a Binance delisting in Oct 2024 and $80M OTC deal with Alameda in 2021,” he concluded.

Mantra did not respond to The Defiant’s request for comment.