In a disturbing development for the DeFi ecosystem, Mantra, a blockchain technology recognised for its decentralised finance solutions, has come under criticism after market makers reportedly took advantage of validation gaps to artificially boost liquidity for its native OM currency.
The Claims
Multiple blockchain analytics companies and whistleblowers knowledgeable about the subject say a gang of market makers distorted validation methods inside Mantra’s liquidity pools, hence generating the appearance of strong trading activity and deep market liquidity. This falsely boosted market presence of OM coin, hence causing deceptive price changes and investor mood.
Insiders claim several controls were bypassed using incomplete or weakly supervised smart contract validation processes. These gaps allowed coordinated entities to mimic large-volume trades, recycle money through several wallets, exchanges, and automated bots to create false real market demand.
How It Functioned
Using validator lags: In real-time data validation, discrepancies let deals be logged as genuine without cross-verification.
Coordinated wallets allegedly participated in fast-fire trading between themselves, hence fraudulently increasing volume and token velocity.
“Liquidity spoofing: Liquidity was presented as deeper than it really was, maybe enticing naive investors into believing the token had minimal slippage and strong demand.
Earlier this month, blockchain security company CertiK identified abnormalities across several DEXs and CEXs where OM is listed, citing “inconsistent liquidity metrics” and “non-organic trade patterns.
Effect on the Market
The OM token fell around 17% in 24 hours after these claims came to light, with additional volatility anticipated as more information becomes public. Several significant cryptocurrency exchanges are now looking at OM token liquidity and the function of market makers linked to the Mantra platform.
OM is now trading at $0.076, down from a monthly high of $0.092.
Mantra’s Reaction
The Mantra team said in a short message published on their official X (previously Twitter) page:
We are aware of the claims and are doing an internal audit. Mantra is dedicated to ethical market practices and openness. Any organisation discovered misusing our protocol will be permanently deleted and notified to relevant authorities.
Notwithstanding the remark, others in the community are demanding real-time on-chain transparency dashboards and an independent third-party audit for DeFi protocols such as Mantra.
Response Swift responses from the larger crypto community include:
“This demonstrates why trustless validation has to come first in every DeFi application,” tweeted @DeFiDad.
Reddit user u/Layer0Maxi said, “Mantra was gaining traction, but if this is true, their reputation may be irreparably damaged.”
