The $OM Collapse Taught Us About Tokenomics

The cryptocurrency market was shaken on April 14, 2025, when $OM, the native token of Mantra Chain, experienced a calamitous price collapse.

The cryptocurrency market was shaken on April 14, 2025, when $OM, the native token of Mantra Chain, experienced a calamitous price collapse.

In a matter of hours, $OM plummeted from well over $6 to just $0.60, marking a cruel 90% drop that wiped out more than $6 billion in market cap and sent RWA (Real World Asset) investors reeling.

This sudden unweaving of what had been one of the most sought-after tokens of late 2024 and early 2025 is now provoking serious doubts about tokenomics, liquidity, and the shadowy leverage trades that make up the crypto markets. Many are making uncomfortable comparisons to the infamous collapse of $LUNA in 2022. The fall of $OM serves as a sober reminder of the fragility that can lie beneath even the most enticing surface narratives.

From RWA Darling to Devastation

Between November 2024 and April 2025, $OM had a spectacular rise. The token’s price increased by more than five times, boosted by enthusiasm for real-world assets and the belief that tokenized finance was on the verge of going mainstream. And if you wanted to find reasons to be even more bullish, you could point to political developments: the increasing likelihood of Trump winning a second term was being discussed in crypto circles as a potential game-changer that could lead to a much more favorable regulatory environment for digital assets in the U.S.

The leading RWA infrastructure provider, Mantra Chain, had situated itself in front as a developmental community in an emerging line of business. Their technical strengths, combined with a favorable market narrative, had pushed $OM into the spotlight, attracting both retail and institutional investors.

The token’s quick rise turned out to be unsteady.

The decline came on fast and fierce. LookOnChain data show at least 17 wallets funneling more than 40 million $OM—over $200 million at the time—onto centralized exchanges. That amounted to about 4.5% of $OM’s circulating supply. The influx of sell orders hit an already thin market and made it even thinner; then it hit the token’s price and took it down hard.

What $6B Lost on $OM Taught Us About Tokenomics?

Early on April 14th 2025, the price of $OM plummeted from over $6 to just $0.60 within hours—wiping out more than $6 billion in market capitalization.

The collapse dealt a significant blow to investors, especially given that… pic.twitter.com/9vizmm9znv

— Tokenomist (prev. TokenUnlocks) (@Tokenomist_ai) April 21, 2025

The sell-off was not only a case of market volatility. The size and coordination of the withdrawals pointed strongly to inside jobs or at least a reasonably well-coordinated, large group of profit takers. More significantly, it laid bare a layer of systemic risk that too many people involved in the ecosystem had failed to see.

$OM had become a widely accepted form of collateral on many DeFi protocols. Its use in lending protocols meant that the token secured a number of other assets and positions that had been leveraged up. When the price of $OM collapsed, it surely didn’t help that a number of assets also started to fall, triggering a wave of liquidations and margin calls—with the $OM liquidations in DeFi adding to the number of crypto assets that were being forced to market.

That’s the basic story. Of course, there are many more details to cover, and there is some crypto Twitter grist from the mill as well.

Lessons in Token Design and Market Fragility

The $OM collapse teaches a cautionary lesson for builders, investors, and regulators. It wasn’t a traditional liquidity crisis, and $OM had a respectable market cap for a crypto asset. But its meteoric rise and the subsequent crash offer insights into the utility-versus-speculation dynamic that many crypto tokens face today.

Investors and token holders must ask themselves: What is $OM supposed to do in 5 years, 10 years? And will it do that if, at the time of writing, it has an 8- to 9-figure market cap? And will the average $OM holder be better off holding $OM or receiving a stream of cash or cash-equivalent dividends from Mantra’s supposedly decentralized legal ecosystem?

The incident also highlights how concealed leverage can accumulate quietly in crypto markets. In contrast to traditional finance, where some visibility into risk exposure is provided by regulatory reporting, the decentralized structure of crypto enables collateral to be used and reused throughout multiple platforms—without a discernible overview of total risk.

The series of liquidation events that followed the fall of $OM show how interwoven the ecosystem had become