- Mantra will burn 300M team-held OM tokens to restore trust after a $5.5B market crash.
- Supporters see it as accountability; others fear it may hurt team motivation. A community vote is proposed.
- Mantra denies insider trading, blames liquidations, and plans buybacks using a $109M recovery fund.
In response to a dramatic crash in the Mantra (OM) token price, Mantra CEO John Mullin announced that the team tokens would be destroyed as the initiative would involve a token burn of all the tokens allocated to the team. By restoring community trust, the move is one of several steps OM has taken since April 13, when the cluster plummeted, some noting that it was reminiscent of the Terra Luna collapse.
300 Million Mantra Tokens Set for Destruction
As per the details already revealed in a blog post from 8th April, Mantra had put aside 300 million OM tokens, around 16.88 percent of the total supply, as rewards for team members and core contributors. Initially, these tokens were locked, and the vesting schedule would gradually unlock from April 2027 to October 2029.
Then, after the token’s collapse, OM was trading at $0.78, which meant that the team’s allocation had a value of around $236 million. However, these tokens were valued at $1.89 billion before the crash. OM’s price dropped from $6.30 to an all-time low of $0.52, resulting in a loss of over $5.5 billion for the market capitalization.
Community Reaction Divided
The burn of the token has created a rift in the Mantra community. Many praised the move as a bold one in the name of accountability, but others worried that it might backfire on the project team as the motivation of its members faded.
Founder of Crypto Banter, Ran Neuner, said that while the gesture seems reasonable, it might be doing more harm than it would have done, increasing the team’s incentive to create and continue building their platform. Mullin also proposed that the final decision on the burn be made by a community vote to get a collective agreement.
Mullin has also promised to publish a full postmortem to go over the events around the OM price crash. He added that Mantra’s $109m Ecosystem Fund could be used for buybacks and additional burns of OM after the Fact to stabilize OM by the note.
Denial of Insider Involvement
The swirling discussions of insider trading and market manipulation have marched the Mantra team out with strong denials of any association with them. It was also debunked that Mantra has a 90 percent control of the OM tokens. While the team did not admit to the root cause of the volatility, they blamed “reckless liquidations” for the market collapse.
Binance and OKX, whose OKT token is the biggest maker of OM trading volume before the crash, also denied their role in the event. The cascade of liquidations at both exchanges cited was OM’s tokenomics and the high volatility of OM’s price.
Path to Recovery
While turmoil raged, Mullin thanked the Mantra community for supporting it. Mantra has seen numerous market downturns in its 38-year history, and he acknowledged the significant financial losses of traders, but re-emphasized the project’s dedication to long-term development.
Long standing institutional supporters such as Shorooq Partners and Laser Digital are also thanked by Mullin for their backing and the transparency they have shown the community during this crisis.
The OM crash has renewed focus on DeFi hype projects, and conversation on the need for transparency, accountability, and burdensome sustainable growth within the crypto space.
As Mantra looks ahead, the actions taken over the following weeks may be a crucial test case to see whether blockchain projects can overcome crises and regain user confidence.
