There is no quiet day for cryptocurrencies. In recent weeks, in addition to the swings for the tariffs announced by the president of the United States, Donald Trump, the ecosystem of digital assets has been shaken by the nth scandal: the collapse of Mantra (OM), a useful token of the utility of the blockchain homonym. After having reached its historical maximum in February, on April 13 more than 90% collapsed in a few hours, from $ 6.3 per Token at 0.5 cents and erasing more than 5,000 million dollars in market value. Currently, it is traded at $ 0.56. The causes of this sinking are not clear, although analysts advance several interpretations and indicate the risks of concentration in the digital asset market.
OM is a governance token, a type of cryptocurrency that allows its holders to participate in the chain governance of a crypto project. Proposals are usually used to vote, make decisions and influence the future of a project and are an essential component of decentralized autonomous organizations (DAOS). “It is a way they have to finance,” explains Pablo Romero, of the Carbon consultancy.
This blockchain It is focused on tokenize real assets: in fact, it had recently signed a $ 1,000 million agreement with an investment conglomerate to tokenar real estate developments and data centers in the Middle East, recalls Javier Cabrera, market analyst. “AND is based on the proof of stake, Which means that the more tokens you have, the more likely you control the network, ”he details. At first, 888 million OM units were launched on the Ethereum network, but Mantra’s goal was to create his own blockchain About the cosmos ecosystem, a system OpenSource which facilitates the creation of block chains. In this ecosystem there was also the Terra/Luna project, which collapsed in 2022.
Romero explains that the company was initially financed with its own Token and also launched the new blockchain. Its objective was to attract investors to start operating with the Token within its own network. However, it barely achieved traction and few tokens circulated at a very high, which artificially inflated the total value of the project.
when the Token began to fall, this demand of demand was revealed: the purchase orders were much lower, and the price collapsed quickly, which indicates that it was overvalued in relation to its real use in the ecosystem. Jorge Soriano, from Cryptan, adds that large sales were produced by institutional investors, which deposited millions of tokens in exchanges, and generated a massive sales pressure in a market with low liquidity. This, added to the panic of retail investors and forced closures on centralized platforms, accelerated the collapse.
In fact, Pastor details that great token holders used it as a guarantee for loans. When the price began to fall, the settlements were activated automatically to cover the loans and that has accelerated the collapse. “There were no buyers to absorb sales and this caused the price to fall even more. The concentration of tokens, which was in very few hands, caused sudden movements and that the fall was stronger.”
What has happened is the sign that some things never change in the crypto world. Bit2me’s expert recalls that when a company issues a token there is a risk of concentration in the hands of few (initial emitters or investors) that could manipulate the price and cause a liquidation waterfall. And it’s not just small projects. “Those who are exempt or with a much lower risk are Bitcoin, which has a high distribution of tokens, and the 25 largest cryptocurrencies, which have a capitalization of about 5,000 million and are moderately liquid,” he says.
However, David Third Lucas, professor of Economics at the Pontifical University of Comillas – ICADE, explains that this Episode raises doubts about how a handful of investors can cause sales and mass settlements of a token. “It is clear that market manipulation and concentration are the order of the day in the crypto market and will continue to cause similar episodes.” Romero coincides with this reading. “For the company it is a good way to finance, but for the investor it has to be a red flag”Analysts doubt that the Token can recover. Pastor confirms that before episodes like this, they tend to disappear since they have lost the market confidence and their reputation.“ It also depends on the real utility of the Token. But before these collapses they carry the token to fail, ”he concludes.
