Mantra and Terra Luna: Nothing in common but a token crash

The recent collapse of the Mantra (OM) token triggered comparisons to the infamous Terra ecosystem crash in May 2022, with some commentators referring to Mantra as the “next Terra.” Still, many in the community argue that the two projects share nothing in common besides visual similarities in price charts.

“While it’s tempting to draw parallels between OM’s recent crash and the Terra Luna collapse, they’re fundamentally very different events,” said Ben Yorke, vice president of ecosystem at the decentralized finance (DeFi) project Woo, in a statement to Cointelegraph.

Alexis Sirkia, chairman of the DeFi infrastructure project Yellow Network, agreed. “There are no real similarities apart from the visual of the price dropping,” he said.

Mantra’s OM token dropped 92% on April 13, dropping from over $6 to around $0.52 within hours. According to data from CoinGecko, OM lost $5.4 billion in market capitalization in less than four hours.

By contrast, TerraClassicUSD (formerly UST) took five days to lose a similar percentage, shedding $17.2 billion.

Mantra’s OM crash in April 2025 versus USTC (formerly UST) crash in May 2022 (seven-day chart). Source: CoinGecko

The LUNA crash was more gradual than both the OM token and USTC. It started plummeting some time before the UST token depegged on May 9, 2022.

Still, the visual resemblance of the price charts has prompted comparisons among observers, despite significant structural differences between the projects.

Woo’s Yorke and Yellow Network’s Sirkia agreed that Terra’s collapse was systemic and occurred due to the failure of its algorithmic stablecoin, while Mantra was not proven to be subject to any systemic flaws.

“OM appears to be more of a case of mismanagement or negligence,” Yorke said, adding that the Mantra crash involved a “large number of insider-held tokens” moved to exchanges, which sparked cascading liquidations.

Source: ZachXBT

“The issue wasn’t a structural flaw in the protocol, but rather a breakdown in token handling and trust,” he noted.

Related: Mantra CEO says OM token recovery ‘primary concern’ but in early stages

“Mantra is not broken. There was no peg to fail. This is a market structure issue, not a protocol failure,” Sirkia stated, stressing that only an event like a smart contract failure could indicate a serious issue in the protocol. He added:

Yorke and Sirkia’s Mantra comments mark the second day after the OM crash, with the token slightly recovering to $0.80 by publishing time after a brutal sell-off from above $6 to $0.50 per token on April 13.

According to the latest update by Mantra CEO John Mullin, Mantra expects to share a post-mortem report detailing the events leading to the crash of the OM token in the next 24 hours.

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