The Fall of OM by Mantra DAO: Accident or Pattern?

Let’s not drag this out—I’ll give you the answer right away: it’s a pattern. And it’s not just about Mantra’s internal processes (let others dig into that). No. The real culprit here... is the CEXs and their market makers. Let me briefly share my thoughts on this.

Market Maker + CEX = Killer, Not a Friend

Since one of my main businesses is tokenomics, I’ve often been paid (25% to 50%) in tokens for my work—locked, of course, with cliffs, vesting periods, and the usual mechanics.

And in 99 out of 100 cases (and I’ve seen more than that since 2016), I’ve watched even solid small- or mid-cap projects get destroyed... by listing on exchanges and flirting with market makers.

By the 2020s, this trend caught up even with large players—ICP, ZK, Scroll, Blast, and others. But let me be specific—no vague claims. Here are some real cases:

• The founder of Gotbit—one of the “darkest” market-making firms—recently entered a plea deal with U.S. authorities for fraud and market manipulation. Quote: “The parties agree that the fraudulent scheme caused losses. Specifically, it caused reasonably foreseeable financial harm to dispersed market participants who purchased crypto at artificially inflated prices and lost money after prices dropped.” We’re talking millions in losses.
• Just weeks before the sUSD depeg, Kain Warwick, co-founder of the decentralized derivatives platform Synthetix, exposed deceptive tactics used by market makers to manipulate crypto prices. Rather than prioritizing real liquidity provision, they began faking volumes on smaller, obscure exchanges—while intentionally avoiding scrutiny on major platforms like Binance and Kraken.
• Binance itself recently blocked a market maker tied to the MOVE token. The firm had links to another entity already banned from Binance. On December 10—just a day after MOVE's listing—this market maker dumped 66 million tokens into a thin market with barely any buy orders.

Add to that the FTX scandal (and don’t forget 3AC, Celsius, etc.), meme coin manipulations (including Trump and Libra), and the fact that 90%+ of volumes on CEXs are faked… and you see what I’ve seen for years.

And yet the blame always gets passed around: insiders, exchanges, market makers, the project itself—anyone but those truly responsible.

Remember the Bybit hack case I wrote about on Hackernoon? It’s been more than a month—still no full audit. And the exchange? Blamed everyone but themselves. Their CEO and team approved faulty transactions blindly, using a free, open-source wallet tool. Unprofessional to say the least. Can You Protect Yourself? Yes.

The 90-90-90 Rule

It’s a known trading principle: in the first 90 days, 90% of traders lose 90% of their funds. To avoid this:

• Diversify. I use a 25/4 strategy:
  • ¼ in hedge assets like BTC
  • ¼ in operational assets like ETH
  • ¼ in stablecoins (mostly DAI)
  • ¼ in high-risk assets like OM

• ¼ in hedge assets like BTC
• ¼ in operational assets like ETH
• ¼ in stablecoins (mostly DAI)
• ¼ in high-risk assets like OM

If you’d entered OM in 2020 and exited early 2025, you could’ve turned $100 into ~$10K.

• Layer diversification within each category. Over 10+ years, I’ve invested in thousands of small projects with tiny sums, and overall, it paid off well.

• Gradual exits. Hit a meaningful high? Take out 1/10 to ¼. Then more if it rises again. The goal: cover your initial, take profit, and let the rest ride.OM collapsed, yes. But the community’s alive, the tech and economics are there—so the chance of recovery isn’t zero (even though its rep took a hit).

• Know your role. Are you a speculator, trader, investor, or enthusiast? Your strategy should match.For me—as an enthusiast—returns are important, but so is helping build a leading DAO in RWA.For a trader, that’s irrelevant.Once you know your role, you’ll stop jumping around aimlessly and start building a balanced mid- to long-term approach.

Will OM Recover?

I don’t know. But I’ll say this: I hope so. It aligns with three key side-trends I care about:

• RWA
• DAO
• L1 decentralization

Sure, there’s a decent chance the project never revives. But I won’t blame insiders, the team, or even the exchanges. I just want to share this clearly:

If a project lists on a CEX—yes, even Binance—expect problems.You’re better off trading on DEXs.Stick to strict diversification and phased exits to hedge risk.And trust no one... except onchain data.

If a project lists on a CEX—yes, even Binance—expect problems.You’re better off trading on DEXs.Stick to strict diversification and phased exits to hedge risk.And trust no one... except onchain data.

As for everything else—don’t overthink it.

Peace.