MANTRA ($OM), recognized as a leading Real World Asset (RWA) project, has gained significant attention in the crypto space, delivering over 200x returns for early investors last year. However, recent developments indicate significant changes in its tokenomics, sparking caution among holders.
Doubling Supply in Progress
MANTRA has initiated its plan to double the token supply from 888.89 million OM to 1.79 billion OM. As of today, the circulating supply has already increased to 905.28 million OM, signaling that the supply expansion began a few days ago.
Liquidity Concerns
According to CoinMarketCap, MANTRA’s current Total Value Locked (TVL) stands at only $13.34K, with liquidity pools (LPs) at $5.5 million. This lack of liquidity makes the token highly volatile and susceptible to price manipulation. This low liquidity allows for easier price control, enabling potential pump-and-dump scenarios.
Inflationary Challenges
With a projected inflation rate of 25% per year, long-term holding becomes less favorable unless the team implements a robust strategy to counteract inflationary effects. Approximately $1.117 million OM ($4 million USD) will be unlocked daily, which, without adequate marketing or strategic interventions, could lead to continued downward pressure on price.
Historical Precedent
This situation draws parallels to 2021 when the price of $OM plummeted from $0.8876 to $0.0172. If no corrective measures are taken, the current inflation and lack of liquidity could replicate a similar price correction.
Short-Term Strategies
Given the potential for price volatility:
Short Positions: If $OM reaches a new all-time high (ATH), it may present an opportunity for shorting, but traders should carefully manage their risk ratios due to the low liquidity.
Take Profit Wisely: In crypto markets, the highest profits often go to those who exit positions at ATH rather than holding for prolonged periods.
Key Considerations
While $OM remains a promising project in the RWA space, its current tokenomics and liquidity constraints warrant caution. A successful strategy from the team could mitigate inflationary impacts, but without it, the price may face sustained downward pressure.
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