cyrpto crash, exposes, liquidity, manipulation, Mantras, market, risks, token Mark April 15, 2025 0 Comments

Mantra’s token crash exposes liquidity risks, market manipulation

The collapse of Mantra this week raises questions about the future of the project, but also on the imminent risks of low liquidity for other DEFI platforms.

Analysts still examine the mantra (About) Collapse, which has erased $ 5 billion from the value of the token. A recent Kaiko report, published on Monday, April 14, examines the liquidity conditions that led to the accident.

According to Kaiko, low liquidity, aggravated by long liquidations, was probably one of the reasons for the accident. A sharp drop in prices overwhelmed the markets, leading to the collapse of the market depth of $ 290 million at only $ 473,000.

Mantra hourly volume and 1% depth of the market, before and after the accident | Source: Dock

In simple terms, there were no buyers to absorb the sales pressure, which exacerbated the collapse. What has aggravated the accident is still the subsequent liquidations of long positions. These liquidations amounted to $ 21 million on OKX only, exerting additional sales pressure on the market.

Did the initiates throw their mantra tokens?

Although the exact cause remains uncertain, Kaiko stresses that a potential explanation is a large sale of initiates. In addition, several independent investigators share this point of view. A blockchain investigator, Max Brown, says the team 90% controlled Token offer to artificially increase the availability of the token.

Oddeyeresearch also said that the crash results from an attempt to manipulate the market. They highlighted the great movements of the CEX with unidentified wallets and on the back, which, according to them, are in fact Mantra portfolios.

1 / The @Mantra_chain The Foundation claims that it was not completely linked to the recent sale of $ Tokens, however we suspect them of engaging in a manipulative collusion of the market, and the sale was caused by a small “betrayal” by a member of the group.

Here is our investigation. pic.twitter.com/2bt35n30i6

– Oddeyeresearch (@oddeyeresearch) April 15, 2025

The crash came, according to Oddeyeresearch, when a member of the group “betrayed” the diagram. They added that this could have been the result of a voluntary sale or forced liquidations. In all cases, the subsequent accident under low liquidity conditions prompted others to sell.

In particular, the forced cex liquidations are what the CEO of Mantra JP Mullin blamed for the accident. However, as exchange transactions are not easily visible on the chain, investigators cannot check independently what has happened.

In both cases, the mantra has so far not come to recover its value. On April 15, OM was still negotiating $ 0.8213, recovering somewhat from its lowest $ 0.4823 the day before. However, OM is around 90% below its $ 7.09 summit last week.

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