Guest: JP Mullin, co-founder of Mantra Original translation: zhouzhou, BlockBeats
Editors Note: The podcast discusses Mantra co-founder JP Mullins explanation for the OM token crash. He expressed a sense of responsibility for the losses of investors and the community, despite no malicious behavior. JP promised to provide full transparency and launch a buyback and burn program to support investors. He emphasized the importance of transparency and continuous communication and expressed his full commitment to repair the current situation and restore the health of the project. He thanked supporters and promised to strengthen interaction and commitment with the community in the future to ensure better development and response to investor needs.
The following is the original content (for easier reading and understanding, the original content has been reorganized):
JP Mullin: Market value aside, I am not happy about this at all. This is an unprecedented event, and many people have lost money and been hurt. I am also hurt, I think our community is hurt, the coin holders are hurt, and the investors are hurt. Even if I did nothing wrong, no negligence or malicious behavior, I still feel responsible.
Host: Im a little curious, you said investors were hurt, but if its trading at 70 cents now, I wonder if they really lost money?
JP Mullin: I think they haven’t lost money yet. And because of this, investors who have circulating tokens have not sold them yet.
Host: I am the host Akuzhman. A lot has happened in the crypto circle recently, and this weekend, the entire circle was paying attention to the plummeting token of a real-asset blockchain project.
The chart we are looking at now shows that the OM token has plummeted by more than 80% in a single day, wiping out approximately $5 billion in market value (at least on paper).
A lot of people are asking what happened, and hopefully today we can get some answers. Wed also like to thank Mantras co-founder for answering these questions, John Patrick Mullin, or JP for short.
JP Mullin: Thank you for giving me this opportunity to talk about this incident and how we plan to respond next.
Host: What has happened in the past 24 hours since you noticed this? How has this been for you?
JP Mullin reacts to OM crash
JP Mullin: This has been a very difficult day for me, for the team, for the community, and most importantly, for the community. Maybe I can just walk through how this happened, break down a little bit the context, and where we are now.
I was in Paris last week for Paris Blockchain Week. I boarded a flight to Seoul, South Korea on Saturday, Paris time, and Im now in a hotel in Seoul. We had an artist-focused summit here today, which I also attended, and I can talk about that later. Basically, I went to bed around 12 am local time. At the time, I sent a tweet saying that I was on a plane and there was no WiFi on the plane, so people thought I was flying.
But I was just asleep because it was late at night. Later, around 5am, I was woken up by a phone call from the hotel. Our team couldnt reach me, so they called the hotel front desk. Then, as soon as I woke up, I was bombarded with a lot of news: the token plummeted, something went wrong, etc. We immediately started checking to make sure it wasnt an on-chain attack, token theft, or other similar issues.
Liquidation triggers token crash?
After communicating with some key partners, investors and exchanges, we quickly discovered that the problem was with centralized exchanges - there were large-scale liquidations because some people used Om tokens as collateral for leveraged positions, and there were also many long positions directly using Om. These positions were forced to close in a short period of time, and it happened to be Sunday night in Asia time, and liquidity was very poor.
I was still asleep at the time, and these positions were quickly liquidated, causing the price to plummet, which in turn triggered more liquidations and sell-offs, and finally led to this massive decline.
So thats when I woke up, and we immediately issued a statement saying we were investigating this and committed to communication and transparency. We have reached out to all of our investors, partners, exchanges, and community members to clearly explain what happened, what steps we are taking, and answer any questions you may have, because this is a very complicated situation.
Host: Let everyone know - we didnt have much communication before the show, we just briefly coordinated the arrangements. So like everyone else, I am just beginning to understand what is going on.
But I was a little surprised that you and your project Mantra have been around for a long time. So can we start from before the crash? Because many people may not know what you are doing. You are working on a Layer 1 protocol that is linked to real-world assets, and the project base should be in Dubai, which is where you spend most of your time, in the UAE.
The core of your project is to tokenize real-world assets, but in fact, the OM token has existed for several years before you launched the mainnet last year. It was an ERC-20 token on Ethereum, right? So can we start from the beginning and see how this project has developed to the present? Because I see that your tokens are actually circulating on several chains. I am also curious about who is selling on the exchange you mentioned just now? If it is not your investors and the tokens were not sold by you, then who caused this wave of market crashes? Do you have any further understanding?
Mantra Creation, Token Design and Bridging
JP Mullin: Let me start with the creation of Mantra so that you can understand more clearly the relationship between the two tokens: one is the early ERC-20 version, and the other is the later mainnet coin.
Mantra was founded in early 2020 during the pandemic, and we launched the ERC version of Om on August 18, 2020. So now, the entire project has been almost five years old. In March 2021, we launched on Bybit. At that time, we started as a DeFi protocol and made some products in the early days. We seized the opportunity of the first wave of DeFi Summer, and the price rose well at the beginning, but later, like the entire market, it fell all the way.
By 2023, our situation was actually very difficult. For example, in October 2023, our coin price fell to $0.017. Then in late 2023 and early 2024, I started meeting with some of my current core partners, including Shorooq, a fund based in the UAE, and Laser Digital, the crypto division of Nomura Securities. They helped us introduce some institutional funds and also pushed us to further build the concept of regulated DeFi protocols.
We were still going through the licensing process with VARA, the regulator in Dubai. Earlier this year, we actually got the world’s first official license for the DeFi protocol. Our new Layer 1 chain is designed for the tokenization of real assets, with built-in compliance frameworks, permission management, identity layers and other functions.
Around that time (late 2023 to early 2024), we started thinking about how to integrate the token model. Initially, we planned to let the two token systems run independently: one is the Mantra ERC token based on Ethereum, and the other is the AUM token on the new chain Omega that we originally planned to launch.
But later we put this matter to a community vote, and the community wanted us to focus our resources on supporting one token instead of two. So we merged the two routes based on the voting results, and from then on we began to focus on how to develop an institutional-level real-world asset tokenization business in the UAE.
In the past month, we have actually announced a lot of major collaborations, such as the collaboration with Mag and Damac Group in the real estate sector. At the same time, we have also officially obtained the compliance license of VARA and officially launched our own chain at the end of last year.
When we launched the chain, we also started the cross-chain bridging process. When we launched the mainnet, about 95% to 96% of the ERC version of the token was in circulation, and now it is about 98%. This ERC token is hard capped, with a total of 8 million. All of this can be verified on Etherscan. The wallet address and distribution are very clear. Many are in exchange wallets, and some are marked wallets.
As for the tokens on the mainnet, most of them are still locked and held in custody by third-party institutions, such as compliant custodians like Anchorage, and there is also a mandatory vesting mechanism.
We actually just released a transparency report last week in response to everyone’s concerns about the details of the token. We will continue to provide more transparent information about wallets and distribution in the future.
Now ERC tokens have actually been bridged to multiple chains, such as Polygon (through Polygon POS Bridge), Binance Smart Chain (OM version on BSC), and even the version on Base.
However, all of these are still within the original ERC total of 8 million. There is no new supply, they are just circulated on other chains through bridging.
Host: I think this part is very interesting. You mirrored the tokens on the old chain to the new chain. This means that if someone wants to transfer the tokens on the old chain to the new chain, they must first destroy (burn) the old one and then exchange it for the new one, right?
These designs are one of the important decisions that long-established projects need to make during their evolution. Now you have learned about the development background of Mantra and how its tokens are now distributed on multiple chains.
Lets get back to the core of this incident. You mentioned yesterday that someone might have built a large leveraged position with OM on a certain exchange, which was later liquidated. In this process, a large number of tokens were thrown out of the market, and the market crash occurred.
So I would like to ask a few questions: First, do you know who did this? Second, which exchange did this happen? Third, did you receive any notification before the liquidation occurred?
JP Mullin: We have actually been communicating with some exchanges before, for example, we would ask them: When were these tokens listed?, Do you know who the owners of these wallets are?, Are these owned by the team? Are they owned by the market makers? and so on.
As for this incident, we have actually been communicating with some exchanges about this issue for the past few months, not just in the past 24 hours. We will pay attention to which tokens flow into the exchange and whether they are used as collateral. But these tokens all come from some clean wallets - so-called clean wallets are those that are transferred from other exchanges, have no historical behavior, and are not connected to the wallets we are familiar with.
I personally keep all the wallets I know of tagged on Etherscan so I can keep track. But the wallets involved in this case were all clean, unmarked, and brand new. That is, they were not directly associated with the team or entities we were familiar with.
We do know that some exchanges played a role in this incident, but I am not in a position to name them at this time. We are now working with institutional investors and partners to evaluate whether there are legal means available to protect our community and investors, because we believe that they have indeed suffered harm and injustice in this incident.
Obviously, this was a massive forced liquidation late on Sunday night in a low liquidity environment. We have not yet contacted the investors who were liquidated, but we have been in communication with some institutional partners, such as Cheroke and Laser.
Moderator: It should be noted that both Cheroke and Laser have publicly stated that they were not the main force in this sell-off. So you just mentioned that this incident occurred at a time of low liquidity, that is, the inactive period on weekends, but in fact, this is one of the reasons why project parties generally cooperate with market makers - to stabilize the market in this case. Can you reveal which market makers you cooperate with? And how did they respond in this incident? After all, in theory, this is when market makers should take action.
JP Mullin: We do have multiple market makers, and they are also our investors. We work with some large trading institutions, who are investors on the one hand, and also hold OM on the other hand, and have loan agreements with us.
But frankly, I dont think they have enough positions to deal with this extreme situation. According to our current understanding, the forced selling may be as high as hundreds of millions of dollars, but we dont have the exact number yet, which is also part of our further investigation. Once we get more information, we will disclose it as soon as possible.
Host: The position you just mentioned is about 100 million US dollars. Is it of this magnitude?
JP Mullin: We think its in that range, and its a very large position. OM is a multi-billion dollar token with a lot of large long-term investors who use it to back other collateral positions and as part of leverage.
And it all happened so quickly—I remember going to bed at midnight and waking up at five in the morning, and it had been going on for an hour or two. We were reacting to it almost completely without knowing it.
This is why we have repeatedly emphasized that this is an unprecedented, sudden and rapid event. We are also working hard to find out more details and share them with everyone as openly and transparently as possible.
Moderator: I agree that this is indeed a very rare situation, especially during the low liquidity period on the weekend. It is also very clear from the price chart. What I am more curious about is that when the community is discussing the issue of on-chain transparency, everyone will ask, if it is not your core investors, then who can establish a position of $100 million? This large-scale liquidation event is obviously unlikely to occur completely within the scope of on-chain transparency, and many things may involve off-chain operations.
As a project founder, I know that these choices are complicated and you have to make decisions between many trade-offs. You have to find a way to list your token on a centralized exchange, work with market makers, and worry that they won’t “backstab” you at a critical moment.
So why don’t we start from 2024? What decisions did you make in the process of launching the project? For example, are there any OTC agreements? What is the structure of these agreements? How did you get to the current situation step by step? Because we all know that there were actually many tokens circulating in the market before the project was officially launched. Did all this lay the groundwork for what is happening today?
What was the situation before the project was officially launched?
JP Mullin: We actually conducted two rounds of mainnet token financing, which are also explained in the transparency report we mentioned earlier. These tokens are still hosted on the Anchorage platform and are locked.
The first round started in October last year, with a lock-up period of 12 months plus 24 months. The release time for another round is also approaching, and the lock-up period for that round is 12 months.
In addition, we also have some investors who purchased ERC version of tokens through OTC. These investors are old investors like Shorooq and Laser. Their wallet addresses are public and everyone can verify that they have not sold any tokens so far. These tokens were designed to have an 18-month vesting period, and are still being vested.
Our first round of financing was completed in February or March last year, and these tokens have been in circulation for a long time. But from the chain, we can see that no one has sold them. We have a group of very long-term investors with the same values. I am really grateful that they have always supported us in this incident, and we will continue to support them.
Therefore, we completely deny the accusations from the outside world that someone is selling coins secretly.
Moderator: Regarding the accusations you just mentioned, I want to clarify what we are talking about. Because I havent seen anyone publicly accusing you, and as a reporter, I must be very rigorous.
I don’t think everything that happens in the crypto world can be simply defined as “running away”, like the Terra incident, I don’t think that was running away. Many times the problems that occur are not due to malicious fraud, and we are not discussing those meme coin projects now.
What we are discussing now is that your team is building a Layer 1 blockchain related to real assets, and is also cooperating with many large institutions, such as the connection with other projects in Dubai that you mentioned earlier.
So I think it is necessary to talk about where you think the problem lies in the whole incident? If you want to seriously do a real and useful project, then where do you think it went wrong? From what you said just now, it seems that you are implying that there is a problem with a certain exchange.
In terms of numbers, the $100 million position you mentioned is basically equivalent to the entire days trading volume in many days of daily trading. To be honest, this scale of liquidation is very drastic.
Where exactly is the problem?
JP Mullin: Im not suggesting that this is just one person operating. To be honest, we think its a group, multiple people acting together. We do think the core of the incident happened in a specific exchange, but we are currently working with all exchanges to investigate and hope to find out as much information as possible.
This is indeed an unprecedented incident, and it is very sad for our community. We will do our best to solve this problem. I have also participated in many AMAs and Spaces in the past few days, just to let everyone know that we have not shirked our responsibilities.
We will take some measures next. The most important thing at present is to deal with the communication issues between public opinion and the community. We also attended a RWA-based summit in South Korea this morning. I was there in person because I wanted to tell everyone that we did not run away or hide.
We have been working on this project for five years, and we will continue to work on it, not just for five years, but maybe even longer.
Repurchase and destruction plan preview
What we need to do next is to restore the confidence of our community and token holders. We are now actively considering launching a buyback program. At the same time, we are also considering whether to destroy some of the token supply released in the future. If these two measures can be implemented together, we hope to announce a plan as soon as possible.
In addition to this buyback support plan, we also hope to provide as much detailed information and transparent on-chain data as possible, using facts and evidence to prove that what we say is true, allowing the community to verify our statements for themselves and see that we are indeed handling this matter responsibly.
Moderator: There is a very realistic question. The number of your token holders has actually increased after the incident. In other words, many people bought in after the price fell. Now that you are going to launch a buyback, everyone will be concerned about how much money you have to execute this plan. Can you tell us about your current funding situation?
JP Mullin: I want to emphasize a few things. Our current operations are completely healthy, with sufficient funds and the business is fully solvent. In addition to existing investors, we have also received many new investors who have offered to support us, including providing funds, participating in repurchase plans, and doing long-term OTC transactions.
We are actively evaluating these options and will launch a complete solution as soon as possible. In the meantime, business will proceed as normal and we will keep communicating updates. So from a financial perspective, we are fine at this time and will continue to move forward.
Transparency, Investors and Market Makers
Moderator: You just mentioned long-term OTC transactions, I think this is also worth everyones attention. Because in the token transaction structure, OTC is actually a common but less transparent method.
You mentioned earlier that the tokens of investors like Laser Digital and Shrooks are locked, and they have publicly stated that they have not sold any of them, but OTC transactions involve the project party privately selling the tokens to others, possibly below the market price.
If such tokens later flow into the market, they may also be regarded by the market as the project party is dumping the market. So I would like to ask, has your project done a lot of OTC transactions before now? Is the number large?
JP Mullin: We have indeed done OTC transactions with some institutional investors, high net worth individuals, and family offices. But these are long-term locked positions, and in fact, none of them have been unlocked yet.
We have set many restrictions in these agreements, such as prohibiting resale or transfer in the secondary market. We have also been working hard to ensure that investors are on the same page with us, for example, they will not hedge, will not be short-term operations, but will be long-term bullish on the project. We do not want any unnecessary selling pressure to appear in the spot or perpetual market.
In addition, we also attach great importance to the health of the entire secondary market, so we will handle all such transactions through our official approval. We do cooperate with some brokers, and sometimes they will tell us that there are institutions that want to buy or sell, and we will coordinate to ensure that these transactions are carried out under our knowledge and supervision to ensure that the market operates healthily.
Moderator: I understand that you have a control mechanism, but back to the question just now: This matter has already fermented in the market. And I have seen your token allocation table. In fact, there are already quite a few early ERC-20 versions of tokens that can be mapped to your mainnet new coins. In this case, is it still difficult to control the number of circulating tokens? It is no wonder that someone can establish a large position on the chain that seems to be very valuable but actually has poor liquidity, right?
JP Mullin: Its not as hard as you think. From what I saw earlier today, over 100 million OMs have been bridged from Ethereum to the mainnet. So yes, there are a lot of tokens coming into the market.
But let’s be clear: we are not selling these “highly liquid” tokens on the market. We are selling those that are locked for a long time and cannot be circulated freely.
Moderator: I understand that you don’t officially sell these circulating coins, but these old coins that already exist in the market can be used by some people to build positions. So when the exchange sees that someone on the chain has used these tokens as collateral and has a large position, they may worry: These coins seem to have a high value on paper, but in fact not many people are willing to take them or the liquidity is very poor. So they force liquidation. Is this the core issue of this incident?
JP Mullin: Why are these tokens valuable on paper, but not actually worth that much? Is it because of liquidity issues? This is not about locked tokens as collateral, but those tokens that can circulate freely are placed on exchanges.
I think all major exchanges have their own risk control mechanisms. Of course, we have indeed communicated with some exchanges, but this type of liquidation should be a matter between exchanges and investors.
Usually this kind of thing doesnt happen overnight, but there will be a process of continuous communication. I didnt participate in this specific conversation, so its hard to comment on the details, but from what we have seen, this liquidation action is very radical and fast, so we are paying close attention to this matter and are considering all possible legal means.
We are also working with investors to evaluate all available options.
Host: I also want to talk about the token plan you announced before, because this incident actually happened shortly after your round of airdrops ended, and at that time you were still preventing Sybil attacks - that is, someone created a large number of fake wallets to receive more airdrops.
As a founder, what do you think about the relationship between this and the timing of liquidation? Has this exposed some risk signals in advance, such as some tokens may have been mistakenly distributed to people who should not have them?
JP Mullin: I think it was just an unfortunate coincidence, to be honest. We did our first 10% airdrop about a few weeks ago, which was actually postponed.
Let me briefly introduce our overall token economic model: We announced the first airdrop plan in February 2024, when we issued 50 million tokens with a total value of approximately $5 million to $10 million. Later, this number rose to a market value of $400 million or even $500 million.
This also means that some of the airdropped tokens are free of charge, which is definitely a concern for old users who paid for them. So we adjusted the lock-up rules to try to balance the interests of both sides. Despite this, we still did the first round of airdrops.
At the same time, we also filtered out Sybil attacks on airdrop addresses, and the proportion was very large. We found that there were indeed a large number of malicious operations, such as hundreds of thousands of addresses trying to swipe airdrops, which is obviously not what we want to see. We want to protect those community members who actually spend money and support the project.
We made the filtering decision in March, and this airdrop was the first round of 10% distribution completed about one to two weeks ago.
Moderator: So I want to add, why do you want to protect the cost price of those users who actually invested in buying tokens? Logically speaking, it is to prevent those who get tokens without spending money from impacting them, right?
JP Mullin: Yes, I think it’s very important - if someone is willing to use their hard-earned money to support your project and your token, I really think it’s my responsibility.
As a founder, this is not only my fiduciary duty, but also a responsibility that I want to take on from the bottom of my heart.
When we find that some people are taking advantage of loopholes to get airdrops, grab resources, and then throw these tokens directly to the real holders who have been with us, it is a harm to our project itself. I cant allow this to happen.
Of course, this does not mean that we do not welcome everyone to participate in the airdrop. In fact, after our airdrop, more than 200,000 wallet addresses still participated in the event on the mainnet.
These people are real users who have passed our anti-sybil attack mechanism and are not using fake identities. They have transferred money and are still holding coins - these people we must protect.
And we not only protect these addresses on the mainnet, we also have hundreds of thousands of original coin holders on Ethereum, and this number does not include wallet addresses on exchanges. So overall, this involves a lot of users, and I take this matter very seriously.
Moderator: Since you said you take this responsibility seriously, as a founder, you actually have two key tasks: The first is to ensure that the lock-up mechanism is clear and enforced. Because some projects do not even do chain storage.
The second is the token price that you mentioned earlier, which has been rising all the way. In fact, we have seen this in the past. This situation often occurs when market liquidity is relatively poor, and some market makers use very low funds to continuously pull up the market and push up the price.
Your project is quite special. On the one hand, there is an existing token, and on the other hand, you have launched a new L1 mainnet, and you also allow users to swap between the two tokens.
As a founder, do you feel nervous when you see these things? You also said that you dont want anyone to buy at a high price. If there is not enough real trading volume or activity in the market to support the price increase, it is easy to form an artificially high price.
From the perspective of the entire crypto industry, many founders are actually betting when they cooperate with market makers - betting that your team can push up the demand for tokens in the future, exceeding the existing and future unlocked supply. This is especially true for projects like yours that have an airdrop + unlocking mechanism in their original design.
So what do you think of this game? In this case, how much responsibility do you think the founder should bear?
JP Mullin: I can explain a little bit about some of the adjustments we made to the token economic model this time so that you can also have a clearer understanding of the overall context.
When we modified the release mechanism (vesting) for this airdrop, we actually also adjusted the teams token release arrangement. The teams tokens are still locked in Anchorage, and the wallet address has been made public and is also written in the transparency report we released.
At the same time, as part of the new airdrop rules, we have extended the token lock-up period for the team and consultants to one of the longest in the industry - specifically, 30 months cliff (no release during the lock-up period) + 30 months linear release.
You know, I actually got the original ERC version of the tokens a long time ago, but I returned all of them and reset the unlocking period. So my tokens are locked for another six years, plus I have already spent four and a half years building the Mantra project. We are in this for the long term.
Ive been with this project through the ups and downs. This isnt the first time weve been through this. I certainly take responsibility for this. This is something weve never seen before. I think there was some malicious intent involved, and were investigating what happened.
The reason why I am willing to sit here and be interviewed by you, the reason why I went to South Korea to attend the summit, and the reason why I have been communicating as openly and transparently as possible is because this project is really important to me, and the community is everything to me.
We will continue to do what we need to do to support the community. I will take it all, whether it is good times or bad. This is indeed one of our most difficult times, but we will continue to move forward, continue to build on the solid foundation we have, and work with our strong partners.
Moderator: I would like to ask you one more question. The malicious behavior you mentioned is new information to me. Can you explain it? Because it sounds more like someone holding a large number of tokens and then being liquidated. In my opinion, this may just be a market behavior and does not necessarily constitute malicious behavior, right?
JP Mullin: I would say that the timing of this event is very suspicious, and the whole process is too uniform to be random. It is unlikely that you will see such a large cascade of liquidations suddenly erupt overnight. Thats why we have to investigate seriously to find out what happened behind the scenes.
Generally speaking, this situation cannot happen instantaneously. You know, if you have experienced a margin call or loan liquidation, you will understand that if you maintain communication with the exchange or lender, proactively contact, provide additional collateral, or seek a solution, the other party will not directly liquidate you, especially it is impossible to liquidate hundreds of millions of dollars in positions at once.
Thats a very large position and it has to be managed very carefully. Our feeling now is that this matter was not handled well, so we are investigating what happened because a lot of people were hurt this time.
Moderator: I agree with you, but this is exactly what everyone is concerned about, especially the relationship between market makers and the communication issues between you. From the perspective of our external observers, we can only rely on speculation. As the person in charge of the project, you are the one who is most likely to know the truth. So the core question is: how did this happen?
Many people say that this logic is not difficult to understand. For example, in your liquidation example, if the price of a token is not formed by natural supply and demand, but is artificially pushed up by some participants, then when the price falls back, the exchange may feel that the price is not real and there is no real buying in the market. Once no one takes over, it will quickly collapse.
From this perspective, the triggering of liquidation is actually reasonable. As the founder of the project, I guess you should have participated in these conversations about tokens, circulation, which exchanges they are listed on, trading volume distribution, etc. At least you should understand how these relationships work, right?
JP Mullin: To some extent, yes. We do have some exchanges reaching out to us and asking, “What’s going on with these tokens? Where did they come from? Why are these tokens being used as collateral?”
They would send me a wallet address, and this address was transferred from a newly created wallet on another exchange, and it looked like a completely unfamiliar new address.
I cant make a determination and have no definitive information to tell where these tokens are coming from, especially if they are coming from a centralized exchange. Obviously, we work with multiple market makers who are also our investors, and Im very happy to tell you who they are: including Laser, Amber, and Manifold Trading. These are all our investment partners.
I can clearly state that we have never worked with market makers to conduct any form of pumping or token price manipulation. We simply do not have the capital to do this, and Mantra has raised limited funds in the past 12 to 16 months. This is not something we would do, and I am willing to state this publicly.
You can say whatever you want about the value of the token, whether it is fair or not, that is for the market to decide. I hope that we can reach a fair market value in the end, and the same is true for the project we are building.
We have really gotten a lot of attention and execution in the last 12 to 15 months. Weve made a lot of big announcements and received a lot of support. Including support from institutional investors, real estate developers, and web2 partners like Google.
So from a due diligence perspective, we have passed all the reviews. We are a regulated project, we have demonstrated all our compliance to regulators and partners, and we have always been transparent and communicated with regulators.
Moderator: If this was a project approved by Vera, Im curious if you had any discussions with them about the events that occurred?
JP Mullin: We certainly contacted them first. So, we have been in contact with them. Overall, everyone is trying to understand what happened. We are committed to being transparent and presenting every fact and information possible.
In addition to the recovery plan, the next step is to present a detailed post-mortem, making all facts and information public as much as possible, including public wallets, etc. We will make everything we know public in order to regain the trust of the community and be able to clearly present our side of the story on-chain.
Shrug has published their wallet, Laser has published their wallet, and we have published our wallet address. We will continue to publish more information and be as transparent as possible. We are not hiding from this. We are here.
How will Om Token develop?
Moderator: I want to continue with the question of transparency, as I said before, Sheriff released their report and said that these tokens that were sold were not theirs. Speaking of transparency, where do we go from here? Where does Mantra go? What will happen to the Om token? Because as you said, there are a lot of questions around these issues right now.
Before this happened, I saw a discussion on Twitter in preparation for this conversation where someone mentioned the issue of transparency and you responded by saying that we had discussed the vicious cycle issue with this airdrop on the supply side.
You basically responded by saying, Im not doing any kind of pump and Im not saying its a bad investment or a good investment. Weve been transparent from the beginning and recently released another report to the community. Im kind of trying to figure out which report you were referring to?
Im not sure if you mean the part about the vicious cycle, but the main question is about transparency of supply dynamics. Even I saw Binance recently mentioned that they warned against listing the OM token due to concerns about supply growth. Im curious if thats what youre referring to.
Im referring to the transparency report that you showed me earlier, where there are different categories, and Im happy to provide the link, but that report was released about a week ago.
As you mentioned, throughout Mantras history we have been releasing updates on the issuance and supply of OM tokens. These started last year when we merged the ERC tokens and the new chain tokens, and the entire process was validated through a governance vote and approval by the ERC20 Mantra community. We have also been releasing updates over the past few months, and while those links are not available now, I am happy to provide them.
You can see the process of these changes. We work very closely with Binance and other exchanges, and we communicate with them immediately whenever there are changes to the token economics. If there are any changes to the economics, we will publicly announce them through publicly verified governance proposals, or through media articles, etc. We will also share this information directly with Binance and other exchanges.
I know Binance is definitely aware of this change, and because of this, many exchanges have decided to support this change, and Binance is one of them. We have contacted them about this change, and they are aware of the change in token supply. This is not new, it happened as early as October.
This does strike me as a bit odd, especially with the idea of a one-to-one mirror burn. Has there been any discussion of whether we should consider converting some of the existing tokens if the existing token supply is too large? As we discussed before, the supply of OM tokens is already large.
Im looking at the proposals right now and a lot of people mentioned this one as being one of those types of proposals, and I remember you mentioned it had 91 votes. I remember you said that when we were doing this, a lot of people said we were done. As the leader of Mantra, can you talk about the decision-making process and whether you would go back and make a different decision?
JP Mullin: I will not change my decision. In fact, if this proposal had not been passed at the time, we would not even have a Layer 1 chain for Mantra.
Initially, we were going to use Mantra’s ERC token, and we were planning to build a completely independent L1 chain that would do some form of airdrop back to OM, and this new token was called Omega AUM.
We had discussions with investors and core team members at the time, and those discussions took place in late 2023 and early 2024, when almost no one had heard of Mantra.
In fact, our token dropped 95%, and a lot of people thought we were done, right? And then we had this almost impossible recovery, which was also supported by the repricing of the OM token, and the launch of Mantras chain with the goal of supporting RWAs. These different narratives and the efforts we made combined to finally get to where we are today.
Regarding this mere bucket, in fact, when we created this new supply for the chain, everything was public and everyone supporting this project was fully aware of this situation. We have been communicating this information since the proposal was released.
The mirror bucket is actually a bridge between ERC tokens and mainnet tokens. We effectively replicate the supply of existing ERC tokens, which can also be verified on the chain. When people send ERC tokens over, these tokens will be sent to the destruction address. Currently, about 100 million tokens have been destroyed.
The whole process is a one-to-one exchange of fungible tokens. You can even see on Bybit that they have both ERC version of OM and Mantra chain version of OM. You can deposit ERC version of OM and withdraw Mantra chain version of OM, and vice versa.
We set a threshold of 30,000 tokens, and when you send tokens through the bridge, this amount will be automatically filled within a few minutes, and new tokens will be released after verification is sent to the destruction address. If the amount exceeds 30,000 tokens, we need a manual process to approve and send the tokens through a multi-signature wallet. This process may take 24 hours to ensure that everything is safe because it involves huge capital flows.
Even when we launched, I forget what the price of OM was at the time, it was still tens of billions of dollars or more of tokens sitting in this bridge wallet. We want to make sure that this doesnt become a target for attacks. We also want to make sure that people can properly bridge their tokens to the mainnet token, which is where all the new activity starts and where were going in the future.
Moderator: You look back now at this 90% drop, and consider that people who may have entered the market when the price was much higher, the price is now far lower than what they invested at the time. If so, as you said, they may have lost their hard-earned money. Do you feel that you and your team have done enough in terms of transparency? Have you told people that these things may happen?
JP Mullin: I do feel like weve been as transparent as we can. I dont feel like the problem is transparency. I do want to continue to be as transparent as possible so that everyone can see that we havent sold any tokens, and investors havent sold any tokens.
Moderator: I dont think people are necessarily upset about you guys selling tokens, and the weird thing is, I know youre not in the US, but the SEC recently released their position on transparency. Specifically, they state that if youre involved in cryptocurrency trading, you need to disclose who the market makers are, disclose the agreements youve entered into, disclose who may hold tokens, and how the supply changes, and thats basically what theyre asking for.
So if we start over now, given that OM is trading at 70 cents now, and it was close to $7 before, its down to a thousandth of what it was, what would you do? If you want to talk about transparency in these protocols, especially given the cost base of these big market makers or investors, this could put a lot of pressure on supply. So if youre talking to new people, what would you disclose?
JP Mullin: I think the best thing we can do right now is to publish as much on-chain information as possible, showing where the tokens are and whats happening.
Moderator: This is about off-chain content, like those protocols and over-the-counter transactions, and thats what my question means.
JP Mullin: I think the off-chain part is relatively public, including the vesting plan that we have made public from the beginning.
So, obviously, we are willing to provide all the information that we can about any agreement that involves a monetary association. We are fully committed to doing that. You know, I will support that, and we will publish, but we cant do everything.
I think right now, investors are going to want to know whats going on. Im glad you asked about both the on-chain and off-chain aspects. We are fully committed to providing as much information as possible, I make that commitment.
Mantras future path
Host: As for what to do next, this is undoubtedly a big question, and it is obviously the reason why many people are paying attention to our conversation now.
I wanted to give you a chance to talk about your next plans and the route you plan to take, because frankly, I hadnt heard of Mantra before this, probably because there is a real difference between you guys over there and us over here, New York and the global crypto community, at least I hadnt heard much about you guys.
But now, given the real world assets on this chain, you said you dont have a lot of funds. So when you mentioned the buyback plan and the plan to recover, I would say that even you probably agree that its almost impossible to get back to those levels before. But how do you think about the plan to get back to that level and the assets that you can operate now?
JP Mullin: Of course, you know, this has happened before. Weve been down over 95% when we launched, and everybody thought we were done, but we came back. We know were going to do this recovery again.
From a founders perspective, whatever I need to do to make sure the community is well taken care of, Im willing to do whatever I can. This is more important to me than anything else, and we need to take action during this difficult time to get back to normal and support our community.
We do have strong long-term institutional partners, and as I mentioned, our company is financially backed, the business remains healthy, and we will continue to move forward and execute on our plans. In hindsight, the institutional interest we saw was very strong, which was really great to see.
We are committed to doing everything we can to execute the buyback program, starting with my personal founder tokens, which I have already re-locked. I am not looking at the financial benefit at this stage, and to be honest, it was never for financial purposes in the first place. So, I want to make sure we can restart this project and move forward.
We will work with our partners such as Subaru, Laser, etc. to develop a reasonable buyback plan, and create a destruction mechanism so that everyone can see what is happening and destroy any unnecessary supply. I have communicated with our investors and they have also promised to help and support this plan.
Moderator: You mentioned these points, want to confirm the normal situation of these processes, you talked about the liquidation issue. If there is investor interest or institutional demand, they may intervene at this time. You are saying that these conversations did not happen, right?
I mean, so far, in terms of demand, the institutional support and investor support that you talked about, its now after a 90% drop, right?
JP Mullin: It happened really quickly, almost overnight. It was a Sunday night, it was sudden, we didnt have much time to react. I was sleeping at the time.
So weve obviously been working with partners who have tokens and they continue to support the project and have financial support, but weve also attracted a lot of new investors who have taken an interest in the project and are continuing to support it and showing that theyre willing to continue to be involved.
So its great to see these new investors come in and understand that weve done a lot of work and this isnt the first time weve faced a challenge like this. Were ready to get back on our feet again.
Moderator: Speaking of the impact this has on you personally, I would also like to ask, you mentioned that you have been working on this project for a while, and I have also seen your past interviews, from talking about Home to before the mainnet launch last year.
For you personally, going through all this, how do you view this process? I have interviewed many founders before, including Do Kwan after the collapse of Terra and SBF after the collapse of FTX, and I have also interviewed many founders of other projects.
For you, after going through these fluctuations, do you feel some kind of relief? Of course, I know you dont sound relieved today. But judging by the volatility of the token, maybe the price is at a lower level now. Like you said, you have experienced similar crashes before, and did you also have a kind of maybe we should be at this point thought?
JP Mullin: I dont think so. You know, market value aside, this is not something I feel relieved about. There was an unprecedented event, a lot of people lost money, a lot of people got hurt, and I dont feel any relief about that at all.
I feel really frustrated, today was a really hard day for me. I feel bad for our community, I feel bad for the people who lost money, I feel bad for our team, some of the foreign investors, it really sucks. I feel really bad to be honest.
So, this is not something Im going to feel any relief about. I feel terrible, but Im committed to doing everything I can and taking every minute to fix this and do the right thing, and I stand behind those words. I believe that the people who have seen us through the last five years will support me in that. You know, Im going to keep my word and do what I can to support this project and take responsibility and not run away from it.
Host: You said you felt bad, and Im trying to figure out what part of it made you feel bad. Obviously, the price drop is one thing, but it sounds like you said it wasnt your fault. So if there was some part that made you feel bad, other than the price, what was it?
Because it sounds like youre saying you didnt sell, and your investors didnt sell either. So from an outside perspective, especially from people who arent in the Mantra ecosystem, what do you think you did wrong?
JP Mullin: I feel bad for those people who believed in the project and the token, and they lost money, they didnt participate in this event, and then woke up and the token fell by 80%, 90%. Its really bad, and I feel bad for those who supported us.
Host: Part of the blame is on you, right? I guess if I could just be clear about what youre feeling sad about? Is it about something you did?
JP Mullin: They believed in me, they believed in the project, and they lost money on it. Like I said, it makes me feel like as a responsible founder, I have a responsibility to take care of the token holders and our backers. I cant help it, I just feel bad for them, and frankly, I dont know what else to say.
I feel hurt. I feel like our community is hurt, our token holders are hurt, our foundation is hurt. I feel responsible, and even though I didnt do anything negligent or malicious, I still feel a great sense of responsibility.
Moderator: Just curious, if your investors are hurt, I want to know if they actually lost money, even though the token is trading at $0.7 right now.
JP Mullin: I dont think they are losing money, which is why investors who hold liquidity tokens have not sold any liquidity tokens so far.
Moderator: So maybe they werent affected as much, but those who came in later were more affected, as you said, which is why were having these conversations and why were talking to you. Maybe if we had talked earlier, maybe more people would have understood the real situation of the project. Again, Im only now starting to understand what youre doing and how it relates to real world assets, and obviously this is a very hot area.
It sounds like youve been doing this for a long time, processing whats going on. So whats your final message to people who are holding this token?
JP Mullin: First of all, I want to thank you for giving us the opportunity to come out and share our position. Again, we will develop a plan to ensure full transparency and disclose what happened and where it went wrong.
So, you can follow me on Twitter and our company Twitter account, all of this information will be released. We will also launch our buyback and burn plan in the next few days to make sure we do everything we can to support investors. We will maintain constant communication with the community. Again, community friends, we will do everything possible to correct this situation.
To those of you who have supported us and reached out, thank you so much. It means a lot to us. To those who have doubted us at this moment, we will continue to work as hard as we can and will come out stronger than ever.
Moderator: I appreciate that. I think sometimes people are reluctant to be transparent and keep people updated on whats going on. And this is relatively unique, especially with the events that happened over the weekend. So I think letting people know everything you know is exactly the kind of transparency that is expected in this field.
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