Mantra’s collapse this week raises questions about the future of the project, but also about the approaching risks of low liquidity for other Defi platforms.
Analysts are still investigating the collapse of the mantra (OM), which has wiped out $ 5 billion of the value of the token. A recent report from Kaiko, published on Monday 14 April, is investigating the liquidity conditions that led to the crash.
According to Kaiko, low liquidity, aggravated by long liquidations, was probably one of the reasons behind the crash. A big prize is overwhelmed by the markets, which led to a collapse of the market depth from $ 290 million to just $ 473,000.
In simple terms there were no buyers to absorb the sales pressure, which worsened the collapse. What made the crash even worse were the subsequent liquidations of long positions. These liquidations only amounted to $ 21 million on OKX, which brought further sales pressure to the market.
Have insiders dumped their mantra tokens?
Although the exact cause remains uncertain, Kaiko points out that one possible explanation is a large sale of insider. Moreover, different independent researchers share this vision. A blockchain researcher, Max Brown, claims the team checked 90% From the token stock to artificially increase the availability of the token.
Oddeyersearch also claimed that the crash was the result of an attempt at market manipulation. They pointed to large movements from CEXS to Non -Geidified portfolios and back, which they think are actually the portfolios of Mantra.
The crash came, according to Onedeyersearch, when a group member the schedule ‘surprise’. They added that this could have been a result of a voluntary sale or of forced liquidations. In any case, the subsequent crash led to sell others under low liquidity conditions to sell panic.
In particular, forced CEX readings are to blame Mantra CEO JP Mullin for the crash. However, because exchange transactions are not easily visible on the chain, researchers cannot independently verify what happened.
In both cases, Mantra has not come close to recover its value so far. On April 15, it still acted at $ 0.8213, somewhat recovering from his $ 0.4823 low the day before. However, around 90% is under the high of $ 7.09 last week.
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