The Mantra token (OM) plummeted over 90% inside an hour on Sunday, crashing from almost $6 to beneath $0.4 and wiping out billions in market worth.
“The timing and depth of the crash recommend {that a} very sudden closure of account positions was initiated with out adequate 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 undertaking claimed that the crash was “triggered by reckless liquidations.”
The crash represents one of many steepest single-day declines in crypto this 12 months, elevating issues over centralized change practices and the steadiness of RWA (real-world asset) tokens.
Mantra is a Layer 1 blockchain constructed for tokenizing real-world property 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 keeping with its web site.
The token seems to have plummeted throughout low-liquidity hours to as little as $0.37, earlier than posting a light restoration to round $0.8, information from CoinGecko reveals. Even so, it is nonetheless down greater than 90% from its February peak of $8.99.
Arkham Intelligence information signifies Mantra DAO burned roughly 21 million OM tokens over separate transactions on April 2.
Rug pull or pressured liquidation?
The Mantra workforce firmly denied public allegations of a “rug pull” or insider token dump. Their allocation stays locked and verifiable on-chain, the workforce mentioned.
Pressured liquidations happen when leveraged buying and selling positions fall beneath upkeep necessities. This triggers computerized promoting that may speed up worth 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 take a look at investor confidence and lift a vital query about how to make sure tokenized property 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 strain” to ascertain compliance, safety, and transparency within the sector continues.
Analysts from Tiger Analysis declined to touch upon the problem pending additional particulars from a media occasion that it informed Decrypt was scheduled this afternoon, Asia hours.
Nonetheless, the Mantra workforce now faces a major problem rebuilding investor belief.
“When discretionary powers are exercised with out due inner and exterior oversight, dislocations like what not too long ago occurred can and can happen, hurting each tasks and buyers alike,” Mullin argued.
The undertaking didn’t instantly reply to Decrypt’s request for remark.
Edited by Sebastian Sinclair
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