The total-value-locked (TVL) on Mantra’s RWA blockchain protocol reached a yearly high despite OM’s 90% price crash.
Mantra TVL surges 500% following OM’s crash
As of April 15, Mantra’s TVL (in OM terms) jumped to 4.21 million OM (~$3.24 million), an increase of over 500% from two days prior, according to data resource DefiLlama.
Mantra’s cumulative TVL chart. Source: DefiLlama.
Interestingly, the TVL rise accompanied a dramatic collapse in OM prices, which plunged over 90% during the weekend. The Mantra team attributed the sell-off to “reckless forced liquidations” initiated by centralized exchanges.
A rising TVL typically indicates that users are locking more tokens into a protocol’s smart contracts via staking, liquidity pools, lending, or farming for yield or network participation.
Analyst DOM spotted “aggressive buying” on crypto exchanges during the 90% OM price crash on April 13, amounting to $35 million worth of OM purchases when “the [Mantra] collapse was happening.”
Mantra total aggregated spot CVD vs. Binance spot price. Source: DOM
Despite the 90% price crash, the simultaneous TVL spike and “aggressive buying” suggest that certain participants saw the collapse as a buying opportunity.
The fact that millions of dollars were deployed while the crash unfolded points to tactical accumulation, possibly by whales, insiders, or opportunistic speculators betting on a rebound or farming incentives.
As of April 15, OM’s price was trading for as high as $0.99, up around 170% from the weekend lows.
OM/USDT daily price chart. Source: TradingView
97% of Mantra TVL is one DApp
Increases in Mantra’s TVL accompany red flags.
For instance, around 97% of Mantra’s TVL growth came from Mantra Swap, the protocol’s native decentralized exchange. Its automated market-making pools accounted for 4.11 million OM in TVL, making it the primary driver behind the sharp uptick.
Mantra Swap TVL performance chart. Source: DefiLlama
A more decentralized ecosystem would have a greater capital distribution with multiple liquidity sources across lending markets, staking platforms, derivatives, etc.
Related: Mantra says one particular exchange may have caused OM collapse
Additionally, Mantra’s fully diluted valuation (FDV) of $1.88 billion as of April 15 dwarfs the total value locked (TVL) of $3.24 million, a glaring disconnect that could signal potential overvaluation.
Mantra TVL vs. FDV (in dollar terms). Source: DefiLlama
With only 0.17% of its theoretical value actively deployed in its ecosystem, the protocol shows low capital efficiency and limited real-world usage.
This imbalance suggests the market cap is likely driven more by speculation than adoption, and with a large portion of tokens likely still locked, there’s a high risk of future dilution as vested tokens are unlocked.
Analyst JamesBitunix posed Mantra’s FDV as a huge risk to OM dip buyers, saying:
“A lot of traders jumped in at this ‘bottom’ — both on spot and with leverage. Personally, I’d trigger another correction — preferably a sweep of the lows followed by a quick bounce.”
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.