Source: Cointelegraph Original: "{title}"
Despite a 90% drop in OM price, Mantra's RWA blockchain protocol has still set a new annual high for total locked value (TVL).
OM plummets, Mantra TVL surges 500%
According to data platform DefiLlama, as of April 15, Mantra's TVL (in OM) soared to 4.21 million OM (approximately $3.24 million), an increase of over 500% compared to two days prior.
Cumulative TVL chart of Mantra. Source: DefiLlama.
Interestingly, the surge in TVL coincided with a sharp decline in OM price, which fell over 90% during the weekend. The Mantra team attributed this sell-off to "reckless forced liquidations" initiated by centralized exchanges.
An increase in TVL typically indicates that users are locking more tokens in the protocol's smart contracts through staking, liquidity pools, lending, or mining to earn yields or participate in the network.
Analyst DOM noted that during the 90% drop in OM price on April 13, there was "aggressive buying behavior" across multiple crypto exchanges, while "the Mantra crash was happening," with approximately $35 million worth of OM being purchased.
Comparison of Mantra CVD spot price with Binance spot price. Source: DOM
Despite the 90% drop in OM price, the simultaneous surge in TVL and "aggressive buying behavior" suggests that some participants viewed this crash as a buying opportunity.
The millions of dollars invested during the crash indicate a strategic accumulation of chips, likely from whales, insiders, or opportunistic speculators betting on a rebound or liquidity mining rewards.
As of April 15, OM price rebounded to about $0.99, up approximately 170% from the weekend low.
OM/USDT daily price chart. Source: TradingView
97% of Mantra's TVL comes from one DApp
The growth of Mantra's TVL comes with some warning signs.
For instance, about 97% of the increase in Mantra's TVL comes from the protocol's native decentralized exchange, Mantra Swap. Its automated market-making pool's total TVL reached 4.11 million OM, becoming the main driver of its significant TVL increase.
Mantra Swap TVL performance chart. Source: DefiLlama
A more decentralized ecosystem typically achieves a broader capital distribution across multiple liquidity sources in lending markets, staking platforms, derivatives, etc.
Additionally, as of April 15, Mantra's fully diluted valuation (FDV) was $1.88 billion, far exceeding its $3.24 million TVL, indicating a potential risk of overvaluation.
Mantra TVL vs. FDV (in USD). Source: DefiLlama
Only 0.17% of the theoretical valuation is actually deployed in its ecosystem, showing inefficient capital use and limited real-world application.
This imbalance suggests that its market cap is more likely driven by speculation rather than genuine adoption. Furthermore, as a large number of tokens may still be locked, the risk of dilution is extremely high as granted tokens unlock in the future.
Analyst JamesBitunix views Mantra's fully diluted valuation (FDV) as a significant risk for OM bottom feeders, stating:
"Many traders rushed in at this 'bottom'—whether in spot or leveraged. Personally, I would trigger another round of correction—preferably sweeping the previous lows first, then rebounding quickly."
Related: Despite Bitcoin rising to $86,000, the death cross still exists—should Bitcoin traders be worried?
This article does not constitute investment advice or recommendations. All investment and trading decisions involve risks, and readers should conduct their own research before making decisions.
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