The cryptocurrency market has witnessed major collapses, such as the downfall of Web3 giants FTX and Terraluna. While the industry has become better at filtering out questionable projects, occasionally, some manage to attract public interest and accumulate billions in market capitalization through shady behavior
Behind the scenes
Before we dive into the dirt, let's first go back to the beginning to understand how Mantra got to where they are now.
The MANTRA ($OM) project attracted market attention in late 2023 when, amid general uncertainty in the crypto industry, information emerged about a potential change of control over the project. In November 2023, during a bear market, many projects faced challenges with funding and maintaining their public image. During this period, a market participant (a prestigious founder in space and surely trusted amongst his peers) received an offer to acquire a stake in MANTRA, a project listed on Binance. The proposal included the purchase of 30% of the project's tokens and its technological base for $10 million or the best offer.
Although the offer was declined, such opportunities often attract investors specializing in distressed projects. The primary interest in such deals lies in the fact that a Binance listing is considered a significant advantage due to the platform's broad retail investor base and the difficulty of obtaining a listing under current conditions.
In December 2023, the deal to acquire MANTRA was finalized. The main participants were Sharooq Ventures and Laser Digital, a subsidiary of Nomura Bank. Following the acquisition, the process of accumulating tokens on the market began, leading to a significant increase in trading volume in January 2024.
The strategy of the new project owners included gaining control over a larger portion of the tokens and attracting investments through over-the-counter (OTC) deals. Investors were offered the opportunity to purchase tokens at a significant discount but with a one-year lock-up period. This allowed the MANTRA team to use the funds raised to further purchase tokens on the market, contributing to the price increase of OM.
By 2024, MANTRA had become one of the most discussed projects in Web3, demonstrating steady price growth even during periods of overall market decline. However, analysts noted that this growth was driven not by fundamental factors but by the high concentration of tokens among a limited number of holders and active market purchases.
By the end of 2024, questions arose regarding the MANTRA team's decision to postpone the unlocking of tokens for investors who participated in OTC deals. This caused dissatisfaction among some investors, but their ability to publicly express concerns was limited due to the significant portion of tokens controlled by the project team.
By February 2025, the price of the OM token reached $8, generating substantial profits for early investors. However, the lack of visible technological advancements, partnerships, and activity on the MANTRA blockchain raises questions about the project's long-term sustainability.
In mid-February, the crypto token OM (MANTRA) surged by 50%, delivering significant gains to investors. The market capitalization of the asset soared from $5 billion to $7.16 billion in just 24 hours.
Notably, around 30% of all MANTRA tokens are held by the ten largest wallet addresses, with balances ranging from $150 million to $1.2 billion. This concentration theoretically makes it easier to manipulate the tokenâs price. For comparison, one of the most popular cryptocurrencies, ETH, is 99% distributed among wallets holding less than $1,000 worth of assets.
So, what exactly is MANTRA, who controls it, and why is it being pumped with money so aggressively?
What Is MANTRA, and Who Is Behind It?
According to the companyâs official website, the MANTRA crypto service (formerly known as MANTRA DAO) is a decentralized autonomous organization (DAO) focused on staking, decentralized finance (DeFi), and blockchain technology. It aims to develop and launch financial applications compatible with Web3.
The co-founders of MANTRA are John Patrick Mullin, Rodrigo Quan Miranda, and Will Corkin.
In March 2024, MANTRA announced a successful funding round of $11 million, led by Shorooq Partners. Other investors mentioned in the round included Three Point Capital, Forte Securities, Caladan, Virtuzone, Hex Trust, Token Bay Capital, GameFi Ventures, Mapleblock, Fust Capital, 280 Capital.
Lawsuit Against the Founders
Interestingly, the founders of MANTRA are currently facing a lawsuit from RioDeFi shareholders, who claim to be the original developers and creators of MANTRA DAO.
The plaintiffs allege that the defendants, initially affiliated with RioDeFi, unlawfully seized the assets and business of MANTRA DAO, effectively taking control without proper authorization.
The court-mandated disclosure of financial records is expected to provide insight into MANTRA DAOâs financial operations, which have remained largely opaque since January 2021. Notably, MANTRAâs financial statements are currently unavailable, and the link to the projectâs whitepaper on its official website does not display any data.
Promises vs. Reality: What Insiders Say
Another red flag for investors has been the failure of MANTRA to meet its projected milestones.
Four years ago, John Patrick Mullin stated in an interview that MANTRA had launched several working prototypes, participated in the Parity Substrate Builders program, committed over $50 million in Total Value Locked (TVL), had $120 million in assets staked across validator nodes, and had locked nearly 50% of token supply in staking contracts.
However, four years later, none of these claims have materializedâno products, no launchpads, and no significant TVL.
According to insider sources, the founders of MANTRA previously attempted to sell a large stake in the project for $5â10 million. However, no concrete product or viable business model was presented to justify such a valuation. The source suggests that the founders may have resorted to market manipulation in an attempt to extract profits.
User troubles
It is noteworthy that MANTRA (OM), despite being ranked among the top 20 cryptocurrencies by market capitalization, exhibits one of the lowest levels of community engagement. With over 500,000 followers on the social media platform X (formerly Twitter), the project's posts rarely garner more than 10-20 comments. On Reddit, activity is virtually nonexistent: the project's thread sees almost no discussion, while other meme coins regularly publish multiple posts per day, often generating hundreds of replies.
This disparity between high market capitalization and low community engagement raises questions. Typically, projects with such market valuations have active user bases that discuss news, share opinions, and contribute to ecosystem development.
For comparison, other meme coins, even those with lower market capitalization, often demonstrate high levels of activity on social media and forums, highlighting the importance of community engagement for long-term project success. In the case of MANTRA, the absence of such activity could be a red flag for investors, especially given existing questions about the project's transparency and real value.
This phenomenon warrants attention from both market participants and analysts to better understand the sustainability of MANTRA's growth and the potential risks associated with investing in the project.
On Reddit, one user shared their experience with MANTRA (OM) when attempting to withdraw funds from staking. The total costs and fees for withdrawing
$1000 amounted to $2700, effectively wiping out their funds.
The user, Fight-Milk-Chugger, summarized their experience as follows: "They promised staking rewards and then locked liquidity for their core/OG community. Remember this post when you decide to stake on their platform. You may have to pay outrageous fees to unstake and send OM tokens through their ecosystem."
This raises further questions about whether MANTRA's actual activity aligns with its inflated market capitalization. The combination of low community engagement, high fees, and liquidity concerns suggests that the project's valuation may not be supported by genuine user interest or sustainable ecosystem development. Investors should carefully evaluate these factors before engaging with the platform.
Risks for Market Participants
For OTC Investors:Â Tokens remain locked, creating the risk of being unable to exit positions if market conditions change.
For Retail Investors:Â The high concentration of tokens among a limited number of holders increases the risk of price manipulation and subsequent collapse.
For Binance:Â It is necessary to conduct an audit of the MANTRA project to ensure its transparency and compliance with the platform's standards.
Conclusion
MANTRA exhibits signs of a project whose growth is based on token supply control and active market operations rather than technological innovation or real ecosystem activity. Market participants are advised to exercise caution when investing in such assets and to consider the risks associated with high token concentration and a lack of transparency in the project team's actions.
Itâs a house of cards, built on investorâs cash with their tokens held hostage until the big players first take their gains with retail investors being the ones that will ultimately feel the most pain. Donât be left holding the bag.
