Mantra Founder and CEO John Patrick Mullin Is Burning 150 Million of His Own OM Tokens in an Attempt to Win Back User Trust

Mantra founder and CEO John Patrick Mullin is working hard to try and win back the faith and confidence of the Mantra community after the OM tokens suddenly dropped 91.7%

Mantra founder and CEO John Patrick Mullin is working hard to try and win back the faith and confidence of the Mantra community after the OM tokens suddenly dropped 91.7% in a single day on April 13. On that day the token dropped from $6.31 to $0.52, erasing $5.63 billion in value.

Given the ferocity and scale of the drop, many OM holders feared that Mullin and the team at Mantra, a layer 1 for real world assets, had engaged in a fraudulent scheme known as a “rug pull,” where major holders sell their tokens onto innocent retail investors, tanking the price. Mullin denies this allegation.

His latest olive branch to the aggrieved community is to burn 150 million of his own tokens, meaning that they will be permanently taken out of circulation by being sent to an irretrievable address on the Mantra blockchain.

At today’s price of $0.53, these tokens are worth $79.5 million and, according to his own statements today on a Proof-of-Talk X Spaces hosted by veteran journalist Michael del Castillo of Media Luna, account for 99.5% of his total OM holdings. In the interview he said that he only has about 800,000 tokens remaining.

Could he try to get these tokens back one day in the future?

This used to be a preposterous question. But not anymore.

The Breaking of a Crypto Taboo

Token burns have become commonplace in crypto over the years. Best compared to a share buyback program, they are a simple way to reduce the float or supply of a token to appreciate its price.

Binance, the world’s largest crypto exchange by trading volume, has an automatic burning process in which it takes a percentage of profits, buys a corresponding portion of its native token BNB on the open market, and then sends it to a burn address. In total the company has burned 259,852.74 units of BNB worth $158 million.

In September 2021, the Ethereum network started a burning program with EIP-1559, in which fees paid by users to the network would be burned instead of being given to validators. During times of high usage the amount burned, which totals 5,230,717 ETH worth over $8.9 billion, outstrips rewards paid to stakers and makes the network deflationary.

This is how burns are supposed to work. But the world of token burns changed on March 17.

On that day, the team behind the crypto exchange Crypto.com overruled the wishes of its own community of CRO holders, the native token behind its Cronos blockchain, in the governance voting process to re-mint 70 billion tokens that it burned in 2021, seen then as a way to boost the price. One large CRO token holder, who spoke to Unchained on the condition of anonymity, said at the time, “they created a precedent that other projects could follow.”

Read more: Crypto.com Forces Through Controversial Vote to Re-Mint 70 Billion CRO

Mullin Disavows His Tokens for Good

This precedent creates complications for any future token burn, especially when it comes to projects with questionable levels of decentralization, like Cronos and CRO, who had the voting power to pass its proposal against the wishes of virtually every other significant CRO holder. There are reports that over 90% of the total OM supply has been under control of the founding team, which could translate to outsized voting power on a proposal such as reissuing tokens, something that the Mantra team disputes.

Del Castillo asked Mullin during their conversation whether he or the Mantra team (which is burning another 150 million OM tokens) would ever try to recover, or reissue, these tokens. An understandable question given the precedent set by Crypto.com and the fact that he just forfeited 99.5% of his OM net worth.

Mullin first answered by walking del Castillo through the proposal and governance process necessary for such an event to take place, saying that validators across the blockchain would have to approve such a step, but he concluded by saying, “I would not be supportive of something like this.”

At this point there is no reason not to take Mullin at his word, who seemed earnest in the conversation. And he understands his significant personal stake in revitalizing Mantra after a historical crash, even for crypto standards.

“Fundamentally, right now I’m being compared to some of the worst people in the space that have come before me,” said Mullin. “I have every incentive in the world in my personal opinion to make sure that I don’t go down as the likes of some of these other guys. I won’t name their names because

News data source: kdj.com

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