As I wrote in my previous post, Mantra (OM) token price recently plummeted by 90%. Reasons are still unclear, kind of collateral liquidation, CEX might be involved... That's what they officially say. Things are simpler I think. OM had reached $11 billion FDV (fully diluted valuation) vs. only a $3 million TVL (total value locked)...

So I sold my Reserve Rights (RSR) to avoid the same issue, since FDV is $742 million, while TVL is around $200 million and declining. So, not as bad as OM, but still overvalued.

Do you see what's happening here? The Real World Asset (RWA) narrative that dominated crypto earlier this year seems to be losing steam. Projects with massive FDVs compared to their actual TVL are particularly vulnerable.

Mantra isn't an isolated case. Several RWA protocols have seen their token prices decline significantly from their peaks. The market appears to be sobering up and reassessing these valuations more critically.

When you have a $10+ billion FDV backed by just a few million in actual protocol investments, that's a recipe for a correction. The gap between valuation and fundamentals was simply too wide to be sustainable.

I'm starting to think we've hit peak RWA hype. Smart money is rotating out of overvalued RWA tokens into projects with more reasonable valuations relative to their actual usage and locked value.

For now, I'm staying cautious with RWA exposure. The Mantra situation was a wake-up call - when the narrative shifts, these corrections can happen suddenly and brutally.

What are your thoughts? Are you still bullish on the RWA sector, or are you also seeing signs that the hype cycle is winding down?