Does the OM Token Burn Fix the Broken Tokenomics of Mantra?

The Mantra team leader and CEO John Patrick Mullin announced the token burning process for the cryptocurrency OM, aiming to allocate 150 million OM tokens and a similar amount for key ecosystem partners to enhance transparency and rebuild trust within the community. According to a press release from the Mantra team, the OM token burning process aims to permanently remove 300 million OM tokens from circulation as part of a broader plan to reaffirm the company's mission of creating an inclusive decentralized financial ecosystem driven by tokenization. This move is a consequence of the event that caused the Mantra OM token to drop over 90%, losing $6 billion in market capitalization. Sent to the Burn Address and Removed from Circulation Despite the Mantra team's announcement of a large supply cut through the OM cryptocurrency token burning plan, on-chain data shows that the price of the OM token has had a negative sentiment. According to the data, the price has dropped another 5% in the last 24 hours to trade at $0.5437 at the time of writing, bringing the cumulative decline to over 91% in the past 30 days. The company's statement indicated that the process of token burning for OM began with the cancellation of more than 150 million OM tokens from Core Contributor and the Team's allocation. These tokens were staked on Mainnet Genesis last October to support network security. The company has issued a statement showing the transaction hashes for verification to support their claims. The stacking cancellation phase will end on April 29, 2025, when all un-staked tokens will be sent to a burn address and removed from circulation. The Accusations of Pulling the Rug The token burning of the cryptocurrency OM aims to reduce the number of tokens staked from 571.8 million to 421.8 million OM. The goal is to decrease the linkage ratio of Mantra Chain from 31.47% to 25.30%, which could potentially trigger an increase in the annual staking percentage (APR) on the chain. The decision to publish the confirmation report of the final token burning reflects an increasing trend among crypto projects to build trust and encourage long-term participation through transparent supply mechanisms and deflation. The Mantra team had to endure eight days of suffering after the sudden crash on April 13, 2025, causing the token to plummet over 90% from $6.32 to $0.50, losing nearly $6 billion in market capitalization. There were immediate allegations of a rug pull as suspicious activities were detected on-chain a few days before the collapse. However, Mullin and the rest of the Mantra team dismissed the rug pull allegations, claiming that the collapse was due to heavy liquidation and implying that major centralized exchanges should be held responsible. Conclusion The token burning of OM aims to impact the staking configuration in the network and has the potential to stabilize the project's tokenomics. The reduction of the network's bonded rate from 31.47% to 25.30% will be significant for those staking OM bond. At the time of writing, OM is trading at around $0.58, up nearly 10% from the low after the flash crash eight days ago.