The recent collapse of the OM token at MANTRA has caused confusion within the community after $5.5 billion was suddenly wiped out. Investigations suggest that the collapse was triggered by a trader manipulating two exchanges.

This incident underscores the vulnerability of many token projects. Despite having a large market cap, a small amount of liquidity led to a significant crash.

Following the OM crash at MANTRA, there have been numerous uncertainties and suspicions of foul play and insider trading. An analysis revealed that the initial drop in the OM price was caused by a trader on Binance perpetuals market, who deliberately dumped short positions, leading to a rapid and severe cascade effect.

The trader continued to unload short positions at regular intervals, causing the crash to escalate. Meanwhile, on the OKX spot market, a significant discount of around 20% was observed.

A large seller on OKX used a limit sell order to maintain the price temporarily, allowing them to unload OM tokens despite the ongoing crash. The issue lies not in a deliberate attempt to engineer a crash but in the ease with which a single entity can manipulate the market.

The incident exposed the fragility of OM's market cap, as it required only a small investment to trigger a severe collapse. Speculations suggest that the trader might not have intended to cause a crisis but was possibly driven by loan terms or risk limits, resulting in unintended consequences.