The abrupt downturn of MANTRA’s OM token has created significant ripples across the cryptocurrency market, propelling its derivatives trading volume to an astonishing 7,000% increase within just a single day.
Data indicates that trading levels soared past $6 billion during this timeframe, with Binance and Bybit contributing to over half of that total. This dramatic rise occurred in tandem with a steep decline in OM’s market capitalization, plummeting from $6 billion to a mere $500 million.
The surge in derivatives trading points to speculative investors quickly trying to capitalize on the token’s extreme fluctuations.
However, this trading surge came at a high price, with liquidations exceeding $76 million during the same period.
At the same time, OM’s futures open interest across leading derivatives exchanges fell by 62% to $132 million, indicating dwindling trader excitement and a cautious market approach.
Open interest, which represents the total number of outstanding futures contracts, often reflects the overall market sentiment.
Binance and OKX under scrutiny
John Patrick Mullin, co-founder of MANTRA, attributed the token’s collapse to “reckless forced closures” implemented by centralized exchanges targeting OM stakeholders.
His remarks prompted swift reactions from Binance and OKX, the two exchanges at the center of the issue.
On April 14, OKX reported “unusual volatility” surrounding OM at 2 A.M. HKT, stating it had tightened risk protocols and issued alerts on the token’s trading interfaces.
The exchange’s CEO, Star Xu, described the incident as a significant setback for the cryptocurrency sector and urged the community to analyze on-chain data for clarity on what transpired.
He stated:
“All on-chain unlock and deposit information is accessible, and all major exchanges’ collateral and liquidation data can be examined. OKX will prepare all reports.”
Star’s observation is particularly notable as market analysts had discovered that 17 wallets deposited 43.6 million OM, roughly 4.5% of the circulating supply, onto exchanges mere days before the collapse.
The majority of these deposits occurred on OKX and Binance, with two wallets reportedly associated with Laser Digital, a strategic backer of the MANTRA initiative.
In contrast, Binance remarked:
“Our initial assessments suggest that the events of the past day stem from cross-exchange liquidations.”
The exchange also indicated that it had implemented risk management measures for OM starting in October 2024, which included reducing leverage and introducing alerts for traders regarding significant variations in the token’s structure, including a substantial supply increase.