MANTRA ($OM ), a prominent Real World Asset (RWA) project, has gained attention in the cryptocurrency market with its impressive 200x returns for early investors last year. However, recent changes in its tokenomics are raising red flags among holders.

Token Supply Doubling: A Cause for Concern

MANTRA has begun the process of doubling its total token supply from 888.89 million OM to 1.79 billion OM. The circulating supply has already increased to 905.28 million OM, signaling the expansion is underway.

Liquidity Challenges Ahead

1. Low Total Value Locked (TVL): MANTRA's TVL stands at just $13.34K, with liquidity pools holding approximately $5.5 million.
2. High Volatility: The low liquidity makes the token highly volatile and susceptible to price manipulation, increasing the likelihood of pump-and-dump scenarios.

Inflationary Pressures Mounting

1. Annual Inflation Rate: With a projected inflation rate of 25% per year, holding $OM for the long term may become less attractive unless countermeasures are implemented.
2. Token Unlocks: Approximately 1.117 million OM tokens (worth $4 million USD) are being unlocked daily, exerting downward pressure on $OM 's price.

Historical Context: A Cautionary Tale

This situation echoes similar challenges faced in 2021, when $OM 's price plummeted from $0.8876 to $0.0172. Without corrective measures to address inflation and liquidity concerns, a similar price correction could occur.

Short-Term Trading Considerations

Given the token's current volatility and tokenomics:

1. Short Positions: If $OM approaches a new all-time high (ATH), traders might consider shorting opportunities, but managing risk ratios is crucial due to low liquidity.
2. Profit-Taking Strategy: Timing exits strategically is essential, as the highest returns often go to those who exit at ATH rather than holding indefinitely.

Key Takeaways

While MANTRA continues to hold promise as a leader in the RWA sector, its current tokenomics and liquidity challenges warrant caution. Investors should closely monitor any updates from the MANTRA team and evaluate their positions carefully to navigate the risks and opportunities presented by the current market conditions.
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