MANTRA has proposed a comprehensive overhaul of its native OM token - shifting it fully from Ethereum to MANTRA Chain, capping total supply at 2.5 billion, and adjusting staking economics - all aimed at bolstering liquidity, scalability, and regulatory compliance as it builds out its real-world asset (RWA) tokenization infrastructure.
The proposed changes mark a decisive step in the protocol’s long-term strategy to evolve from an Ethereum-based DeFi project into a vertically integrated blockchain ecosystem tailored for institutional-grade RWA issuance and adoption.
The core of the proposal involves migrating the OM token from its current ERC-20 format on Ethereum to a native asset on MANTRA Chain, a Layer 1 blockchain built using the Cosmos SDK. According to the governance post, over 250 million OM tokens - roughly 28% of the ERC-20 supply - have already been bridged to MANTRA Chain.
The team now intends to complete the full migration by January 15, 2026, after which Ethereum-based OM tokens will be deprecated. A “sunset phase” will see the OM bridge closed, and any unclaimed ERC-20 tokens reclaimed by the MANTRA Chain Association (MCA) for future ecosystem development.
In the post, MANTRA stressed the process will be transparent and fully guided. “Clear instructions and timelines will be issued to users, validators, and liquidity providers,” the team said, ensuring continuity for stakers and holders across the transition. To align the network’s economics with long-term sustainability, MANTRA proposes resetting OM’s inflation rate back to 8% per annum, which it believes can support an estimated 18% staking APR.
This rate had previously been lowered amid market corrections and inflation concerns, but the team now believes that restoring it will make staking on MANTRA Chain competitive without over-inflating the token’s supply.
Crucially, a hard supply cap of 2.5 billion OM tokens will be implemented via a Bank Module update, anchoring OM’s tokenomics closer to deflationary models favored by long-term crypto investors. The cap also responds to community concerns around inflationary pressures and long-term value dilution.
Cross-Chain Liquidity Consolidation Begins
Another major change is consolidating OM liquidity from multiple Layer 1 and Layer 2 blockchains - including Ethereum, Polygon, Base, and BNB Chain - into the MANTRA Chain.
This process will begin immediately after the proposal is approved and will unfold in several phases. According to the roadmap, Ethereum liquidity migration is scheduled for Q4 2025, while other chains will follow earlier.
Consolidating liquidity will strengthen MANTRA Chain’s DeFi infrastructure, creating deeper native pools, tighter spreads, and greater capital efficiency for ecosystem users. It’s also expected to simplify routing and reduce arbitrage inefficiencies across fragmented liquidity venues.
The move mirrors broader industry trends where emerging Layer 1 chains, such as Avalanche and Sei, have incentivized projects to repatriate liquidity in pursuit of ecosystem lock-in and protocol-owned value.
As part of the chain’s technical and governance overhaul, the MANTRA Chain Association (MCA) will reduce its own validator nodes from five to two by Q3 2025, redistributing stake among independent validators to enhance decentralization.
This move responds to criticism around validator centralization on Cosmos-based chains and aims to demonstrate MANTRA’s commitment to neutral governance as it courts RWA issuers, institutional partners, and regulators.
Additionally, the MCA will activate commission fees on its validators by the end of 2025. The income generated will be redirected toward ecosystem development and possibly community-led initiatives - encouraging greater public participation in governance and staking operations.
Reallocating Incentives Toward Growth
To sustain long-term innovation and user acquisition, MANTRA proposes redirecting funds from “Sybil resistance” measures and standard staking incentives into three strategic buckets:
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MultiVM Development: Resources will be allocated to build support for multiple virtual machines (like EVM, CosmWasm, and potentially Move or SVM), making MANTRA more attractive for cross-chain builders.
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RWA Issuer Onboarding: The chain will invest in onboarding tools, compliance pipelines, and incentive programs to attract RWA issuers - a major component of MANTRA’s future product vision.
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User Incentives for Adoption: OM tokens will be used to incentivize wallet activity, staking, and DeFi interactions among retail users to bootstrap usage of RWA-linked products.
These targeted reallocations follow a broader shift among Cosmos-based chains and app-chains that increasingly rely on protocol-level grants and partnerships rather than indiscriminate airdrops.
The proposal is currently up for on-chain governance voting, which is set to conclude on August 22. If passed, the upgrade roadmap will immediately enter its execution phase, with liquidity movements and developer incentives prioritized for Q3 and Q4 2025.
Community reactions have been largely optimistic, with many users supporting the native token migration and inflation cap as necessary steps to reverse OM’s prolonged downtrend.
However, critics warn that executing the migration without introducing additional utility for OM - especially in RWA-linked products - may not be sufficient to reignite market demand. Others remain concerned about the concentration of ecosystem tokens in foundation-controlled wallets.
Market Context: OM Price Struggles Continue
The proposal comes at a turbulent time for OM, which has lost 22.5% over the past month and is trading at $0.23 at press time, according to BeInCrypto.
The token is still down more than 90% from its all-time high, with prior recovery efforts - including aggressive token burns and marketing pushes - failing to generate sustained momentum.
If the governance proposal passes, the successful execution of these tokenomics changes and ecosystem improvements may serve as a turning point for OM. Still, investors remain cautious amid broader market volatility and a shift toward Layer 2-native and RWA-focused protocols.
Longer-term, the migration and supply reforms serve a larger objective: positioning MANTRA as a leading platform for real-world asset tokenization. As regulators warm to asset-backed stablecoins and tokenized treasuries, MANTRA seeks to provide the blockchain rails for onboarding bonds, real estate, and other regulated instruments.
By consolidating liquidity, enforcing a fixed token supply, decentralizing governance, and incentivizing compliant RWA integrations, MANTRA aims to compete with initiatives like Ondo Finance, Polymesh, and Tokeny - all of which are pursuing tokenized capital markets.
Final thoughts
MANTRA’s governance proposal represents one of the most comprehensive token migrations in the current crypto landscape. If successful, the initiative could rejuvenate OM’s utility, deepen ecosystem liquidity, and accelerate the chain’s RWA roadmap.
Yet the effectiveness of these changes - especially their impact on price recovery and user activity - remains contingent on execution quality and broader market dynamics.
For now, all eyes are on the August 22 vote and what it could mean for the future of one of the crypto industry's most ambitious appchains.