Mantra links OM token crash to risky crypto exchange policies

Update (April 30, 4:10 pm UTC): This article has been updated to add a comment from Mantra CEO John Mullin.

Decentralized finance (DeFi) platform Mantra has called for industry-wide cooperation to reduce investor risks in the aftermath of its OM token crash.

On April 30, Mantra published its latest update since the sudden collapse of its OM token, claiming that the incident was “bigger than Mantra.”

“Liquidation cascades could happen to any project in the crypto industry,” Mantra CEO John Mullin warned in the post, pointing to the role of “aggressive leverage positions” on exchanges as a broader threat to investor safety.

Mantra’s industry-wide call to action is the biggest section in the latest OM crash update. Source: Mantra

“We’re cooperating with major exchanges to improve market stability, and we’re calling on the rest of our industry to provide input on how exchange policies can minimize — or continue to permit — policies that create risk to investors,” the update states.

Progress includes governance improvements

Aside from calling global centralized exchanges to review their leverage policies, Mantra listed a few key solutions following the OM crash.

The first point concerned governance improvements to the Mantra chain with a focus on decentralization. Mantra has pledged to accelerate its validator diversification efforts by winding down internal validators and adding more support partners.

“By the end of Q2 2025, we’ll have reduced internal validators by half and onboarded 50 total external partner validators,” the update states.

Additionally, the update mentioned that Mantra has burned 150 million staked OM tokens, permanently removing them from the total supply.

To enhance transparency, Mantra has introduced a real-time dashboard featuring tokenomics data. It has also begun alpha testing a new Ethereum Virtual Machine-compatible testnet called Omstead, aimed at improving technical resilience.

The post highlighted that the Mantra chain continued operating without interruption during the price drop, even with transaction volumes at all-time highs.

OM crash is result of “aggressive leverage positions”

CEO Mullin pushed back on the idea that the broader industry, including exchanges, should be blamed for the OM crash, saying that any listed project could experience a similar downturn.

“To be specific, exchange policies that allow investors to take aggressive leverage positions on top of their own tokens are enormously risky,” Mullin told Cointelegraph.

Source: Liam/Mantra

The CEO did not point to any particular leverage positions or exchanges, stating:

“There are reasons that these kinds of positions are allowed by exchanges, but we should acknowledge that it does increase risk for projects across the industry and it’s a conversation we should all be having.”

Mantra has refrained from naming any exchange following the OM liquidations, though social media speculation suggests OKX as a possible contributor. “Let’s finish that report,” one commentator to Mantra's post said on X, adding: “Make sure a liquidation cascade can never happen again on OKX.”

The industry seems unwilling to respond

While Mantra has repeatedly called for collaboration with exchanges, the issue does not appear to have been meaningfully addressed by crypto trading firms.

OKX has declined to comment on the Mantra situation or potential policy collaboration in the aftermath of the OM token crash, despite multiple requests from Cointelegraph.

In the meantime, OKX CEO Star Xu was one of the first crypto executives to highlight the massive scale of the OM crash shortly after the incident occurred on April 13, calling it a “big scandal to the whole crypto industry.”

Source: Star Xu

Binance did not immediately respond to Cointelegraph requests for comment.

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