April 2025 has so far been a turbulent month for the crypto market. What seemed like a normal start to Q2 ‘25 soon turned into a chain of unexpected events, each revealing just how fragile and complicated some of the industry’s boldest projects can be. In this edition of the Crypto Market Monitor, we unpack the latest on-chain developments: from extreme price crashes to deeper questions around how decentralisation, risk and protocol governance are really being handled.
Mantra’s Meltdown
On 13 April 2025, the crypto world watched in disbelief as Mantra, a leading name in real-world asset tokenisation, experienced a dramatic market collapse. Within minutes, its token $OM dropped from $6 to just $0.60. This was a staggering 90% fall that wiped out over $5.5 billion in market value. This sudden crash didn’t just shake confidence; it exposed serious weaknesses in how the project was run and raised questions about the future of the entire real-world asset space.
Mantra had built a strong reputation by trying to bring traditional assets (like property, bonds and treasury bills) onto the blockchain. Backed by a mix of institutional and retail investors, the project looked set for success. But behind the scenes, tension was building. One major issue was how $OM was being distributed. An initial plan to release 50 million tokens with partial unlocks was unexpectedly changed to a 0.3% daily unlock rate, followed by a multi-year vesting period until 2027. While this was meant to provide long-term stability, it left many in the community frustrated. They felt shut out of key decisions and unsure of the project’s true direction.
The crash itself began to unfold in the futures market on Binance. A series of large bets against the token were placed within seconds of each other, creating strong downward pressure on its price. Liquidity on other platforms like Bybit and OKX began to thin out. One trader on OKX (now infamously nicknamed the OKX OM-Whale) placed aggressive orders that pushed the price down further, fuelling panic.
At the same time, activity onchain revealed more signs of trouble. A wallet that had been staking $OM for over a year had suddenly started moving large amounts of tokens to exchanges. While not proof of anything on its own, this move seemed to fit into a bigger pattern of selling that added to the chaos.
In the end, nearly 4 million $OM tokens were sold in a short time, triggering a wave of liquidations and wiping out what little confidence remained. What may have started as a calculated trade quickly turned into a complete collapse, shaking the community’s faith in the project.
Mantra’s downfall is yet another harsh reminder of the risks involved in building new financial systems on top of old ones. As promising as real-world asset tokenisation may be, this event shows how important it is for projects to be transparent, fair and ready for tough market conditions. Without that, even the most exciting ideas can fall apart overnight.
Arbitrum’s DAO Drama
A recent episode in the Arbitrum DAO has brought the cracks in decentralised governance into sharp focus. A user known as hitmonlee.eth spent just 5 ETH (roughly $10,000 at the time) to gain control of 19.5 million ARB tokens’ (valued at around $6.5 million) worth of voting power. This was done through Lobby Finance, a platform that allows users to delegate their voting rights to others.
With this newly acquired influence, the user backed community member CupOJoseph’s bid for a role on the DAO’s Oversight and Transparency committee. While vote-buying isn’t a new concept, the scale and ease of this move raised eyebrows across the community. It showed just how cheaply large-scale voting power could be bought, raising serious questions about how decentralised onchain governance really is.
Lobby Finance defended its model, saying it promotes transparency and open participation. At the same time, it admitted the system isn’t perfect and agreed that stronger guardrails may be needed to prevent abuse. This incident has since ignited a broader debate within the community about what should be done. Some have called for votes bought through such platforms to be disqualified. Others want stricter mechanisms, like routing funds through trusted channels that can step in if misuse is detected.
Now, the ball is in the community’s court. The Arbitrum Foundation has stated it won’t impose a top-down ban on vote-buying. Instead, it wants the community to decide how to move forward. Should votes purchased with money be allowed at all? Should there be penalties when manipulation is proven? Or should the DAO accept this as part of a free market system?
At the core of this debate is a deeper issue: the weaknesses of the “one token, one vote” model. This situation has made those weaknesses impossible to ignore. Real change would mean more than patchwork fixes; it would require a serious rethink of how power is distributed and how decisions are made in the Arbitrum ecosystem.
The Hyperliquid Storm
Since launching, Hyperliquid has been through serious security scares with each one threatening a collapse. Here’s the full story of how it unfolded, with the most dramatic chapter arriving just over a couple of weeks ago.
In January earlier this year, a whale took out a massive $300 million leveraged bet on ETH. The trader started pulling out their margin after gaining $8 million in unrealised profits, pushing the liquidation threshold higher. When things went sideways, Hyperliquid’s insurance pool (made up of funds deposited by users into the HLP vault on the platform) had to take over the position and ended up losing around $4 million. The platform’s internal risk controls were clearly out of sync. What the market did not know back then was that this would not be an isolated incident.
The biggest test, however, came on March 26th and this one nearly broke the protocol. At the heart of the drama was a nearly-forgotten meme token called JELLY, trading on Solana with barely $10 million in market cap at the time. An attacker deposited $3.5 million in USDC on Hyperliquid and opened a massive short position on JELLY hitting the platform’s leverage limit. Moments later, a whale holding 126 million JELLY started dumping their tokens on the spot market, crashing the price and making the short wildly profitable. Then came the punch in the gut: the attacker quickly withdrew most of the margin, leaving the short undercollateralised. Hyperliquid’s automated system kicked in, forcing the HLP vault to absorb the entire 398 million JELLY short. The attacker then switched sides buying back spot JELLY aggressively on centralised exchanges (CEXs), pumping its price up more than 3x. Hyperliquid’s fund was now staring at over $10.5 million in unrealised losses. If the price had climbed to $0.16, the damage could’ve been a staggering $240 million.
While Hyperliquid scrambled, major exchanges like Binance and OKX suddenly listed JELLY perpetual contracts, feeding the frenzy. Some believed the move was a calculated attempt to push prices even higher, worsening Hyperliquid’s position. To top it all off, what happened next raised the most eyebrows. Just 26 minutes before Binance went live with its JELLY listing, Hyperliquid’s Validator Committee voted to delist JELLY. And the final closing price? Exactly where the original short began, giving HLP a small $700K gain instead of a colossal loss.
In doing so, Hyperliquid walked away from one crisis but at a cost. Its decentralised structure took a back seat in order for the protocol’s survival. It was clear: when push came to shove, centralised decision-making was still steering the ship.
From the incident, one thing was certain: Hyperliquid has to tighten its systems. Fixing these flaws won’t be cheap and it will demand investment from the protocol’s treasury. But if the goal is long-term resilience, it’s a cost that can’t be avoided. The platform clearly delivers and its activity metrics point to this. That said, no system is immune to attacks. If there’s a weakness, exploiters will try to take advantage. Their rapid delisting of JELLY may have been strategic but the spotlight has shifted back to Hyperliquid’s internal handling. The decision to exit the JELLY trade was made by a small group of validators and executed at a price significantly below the live market. While this prevented a much larger loss (and even resulted in a net gain), it raises uncomfortable questions about how decentralised the system really is.
Hyperliquid may have survived the episode. It may even come out slightly ahead financially. But unless it addresses its weak points and becomes more transparent in how it operates, the platform risks damaging the trust that’s helped it grow this far.
Conclusion
The last few weeks have laid bare the gap between crypto’s bold promises and the realities of building something that lasts. The message from the market has been loud and clear: strong risk controls, clear decision-making and reliable liquidity aren’t just nice to have but are essential. For projects like Hyperliquid and Arbitrum, fixing the issues will take more than just code. It will mean rebuilding trust, staying open with their communities and showing they can handle pressure when it counts.
As for Mantra, its collapse should be a wake-up call for any project hoping to serve institutions. Risk management and smooth operations aren’t optional – they’re the bare minimum. Now, with these couple of events in the past, the industry faces a choice: take these lessons seriously or be prepared to navigate far more turbulent waters.
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