Overview
- Papertrade launched on HyperEVM offering up to 1,000x leverage and mints PAPER only when a trader closes at a loss or is liquidated, creating a direct reward for deliberate losing trades.
- Early launch activity produced massive notional volume and fees, with research reporting roughly $56 million taken into the pool in launch week and more than $50 million paid to PAPER stakers.
- Farming tactics included racing liquidations and delta‑neutral setups that exploited generous early mint rates, and roughly $20 million of market orders on Hyperliquid moved Papertrade prices by about 10–20 basis points, showing cross‑venue price‑feed vulnerability.
- After heavy farming, Papertrade tightened open‑interest caps, made PAPER non‑transferable on October 20, and deployed a new mint curve on October 21 that mints a fixed share per loss and applies up to a 5x multiplier when the pool is underwater.
- Those changes coincided with a collapse in activity and payouts — staking revenue plunged about 93% in a day, open interest and TVL fell sharply, and observers warn the pool, small USDC reserves, FIFO payout queuing, and the new refill multiplier raise real settlement and dilution risks for stakers.