The Mantra token (OM) plummeted over 90% inside an hour on Sunday, crashing from almost $6 to under $0.4 and wiping out billions in market worth.
“The timing and depth of the crash counsel {that a} very sudden closure of account positions was initiated with out ample warning or discover,” Mantra co-founder John Patrick Mullin said on X.
Mullin claimed positions have been “closed with out margin calls or discover,” suggesting change actions triggered the cascade.
In a separate official message, the venture claimed that the crash was “triggered by reckless liquidations.”
The crash represents one of many steepest single-day declines in crypto this yr, elevating considerations over centralized change practices and the soundness of RWA (real-world asset) tokens.
Mantra is a Layer 1 blockchain constructed for tokenizing real-world belongings with regulatory compliance baked in. Powered by the Cosmos SDK, it helps IBC and CosmWasm, making it interoperable and good contract-ready throughout a number of chains, in response to its web site.
The token seems to have plummeted throughout low-liquidity hours to as little as $0.37, earlier than posting a gentle restoration to round $0.8, knowledge from CoinGecko exhibits. Even so, it is nonetheless down greater than 90% from its February peak of $8.99.
Arkham Intelligence knowledge signifies Mantra DAO burned roughly 21 million OM tokens over separate transactions on April 2.
Rug pull or compelled liquidation?
The Mantra group firmly denied public allegations of a “rug pull” or insider token dump. Their allocation stays locked and verifiable on-chain, the group mentioned.
Pressured liquidations happen when leveraged buying and selling positions fall under upkeep necessities. This triggers computerized promoting that may speed up value declines.
For Mantra, a key participant within the RWA tokenization sector, the incident threatens its partnerships with organizations like Google Cloud and Dubai’s DAMAC Group.
“Incidents like this check investor confidence and lift a crucial query about how to make sure tokenized belongings may be made safer for mainstream adoption,” Hank Huang, CEO of Kronos Analysis, informed Decrypt.
Huang mentioned that the alleged hack signaled that the RWA sector is “nonetheless in its infancy, with a lot work wanted to construct really resilient infrastructure,” because the “mounting stress” to determine compliance, safety, and transparency within the sector continues.
Analysts from Tiger Analysis declined to touch upon the difficulty pending additional particulars from a media occasion that it informed Decrypt was scheduled this afternoon, Asia hours.
Nonetheless, the Mantra group now faces a big problem rebuilding investor belief.
“When discretionary powers are exercised with out due inside and exterior oversight, dislocations like what just lately occurred can and can happen, hurting each tasks and buyers alike,” Mullin argued.
The venture didn’t instantly reply to Decrypt’s request for remark.
Edited by Sebastian Sinclair
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