Red flag? Mantra's TVL jumped 500% as OM price collapsed

Mantra's total value locked (TVL) unexpectedly surged 500% to $3.24 million despite a 90% crash in its native token, OM. This increase coincided with significant OM buying on exchanges, totaling $35 million. The TVL rise primarily stemmed from Mantra Swap, a decentralized exchange, accounting for 97% of the total. Analysts noted aggressive buying during the price crash, suggesting opportunistic investment. However, Mantra's fully diluted valuation of $1.88 billion drastically exceeds its TVL, indicating potential overvaluation. This massive discrepancy reveals low capital efficiency and limited real-world usage within the ecosystem. The high concentration of TVL in one application raises concerns about decentralization. The market capitalization seems driven by speculation rather than widespread adoption. Unlocking of vested tokens poses a risk of future dilution. Analysts warn of potential corrections due to the high FDV and leveraged positions. This summary does not provide financial advice.