Papertrade tightens open interest caps after trader nets $1.28 million via Hyperliquid price moves
A trader made $1.28 million on newly launched exchange Papertrade by moving ETH prices on Hyperliquid before subsequently losing $450,000 to liquidations. The platform announced tighter open interest caps amid allegations highlighting vulnerabilities in its midpoint pricing model.
A trader netted $1.28 million on newly launched perpetuals exchange Papertrade by moving ETH prices on Hyperliquid, according to reporting by The Block. The platform, which advertises up to 1,000x leverage, announced that it is tightening open interest caps in response. The trader's wallet subsequently lost $450,000 when 30 short positions were liquidated on Saturday night after remaining open for more than three hours.[2][4][3]
The windfall follows concerns regarding Papertrade's pricing mechanics. Wu Blockchain reported that X user @Dr_bobo54 alleged two wallets manipulated the protocol by executing roughly $20 million orders on Hyperliquid to shift ETH quotes by 10 to 20 basis points while maintaining large positions on Papertrade. Papertrade operates on HyperEVM and relies on the midpoint of Hyperliquid's best bid and offer (BBO) as its execution price. Trader Rune pointed out that Papertrade's own documentation identifies BBO manipulation as an unresolved protocol risk. On-chain commentator @KookCapitalLLC similarly reported that a Hyperliquid whale drained $1.28 million from the protocol within its first eight hours, sharing transaction logs that recorded several large withdrawals, including a single transfer of $1,543,488.79.[6][5]
The manipulation allegations remain independently unverified, and Papertrade has not officially confirmed protocol losses. However, Crypto Briefing reported that the platform's loss-funded pool showed $3 million and noted that volatile high-leverage trading has impacted liquidity and staker rewards. A dashboard chart shared by @Dr_bobo54 showed Papertrade house funds dropping from a peak near $6 million down to $2,088,839.30 on Oct. 10.[1][3][6]
Key facts
- The Block reported that a trader netted $1.28 million on 1,000x exchange Papertrade by moving ETH prices on Hyperliquid.
- Papertrade stated it is tightening its open interest caps in response to the trading activity.
- The same trader wallet subsequently lost $450,000 when 30 short positions were liquidated after staying open for over three hours.
- X user @Dr_bobo54 alleged two wallets used $20 million orders on Hyperliquid to swing ETH quotes by 10 to 20 basis points against Papertrade positions.
- Papertrade uses the midpoint of Hyperliquid's best bid and offer as its execution price, which trader Rune noted is listed in the platform's docs as an unresolved risk.
- Transaction records shared by @KookCapitalLLC showed Papertrade outflows netting roughly $1.28 million within eight hours of launch.
- Crypto Briefing reported Papertrade's loss-funded pool showed $3 million and noted that high-leverage trading affected platform liquidity and staker rewards.
- Papertrade has not confirmed any protocol losses, though a shared dashboard chart indicated house funds fell to $2,088,839.30 from a peak near $6 million on Oct. 10.
Sources · 5 sources
- CB
Crypto BriefingArticle ·
Papertrade faces oracle manipulation allegation as its loss-funded pool shows $3M The oracle manipulation allegation highlights vulnerabilities in DeFi platforms, potentially affecting trader confidence and market stability. The post Papertrade faces oracle manipulation allegation as its loss-funded pool shows $3M appeared first on Crypto Briefing .
Open source - TB
The Block@TheBlockCoPost on X ·
THE BLOCK: A trader netted $1.28 million on new 1,000x exchange Papertrade by moving ETH prices on Hyperliquid. Papertrade says it is tightening open interest caps in response. https://t.co/Enh0H6zCFF
Open source - CB
Crypto BriefingArticle ·
Trader nets over $1M on Papertrade’s launch, then loses $450K High leverage trading on Papertrade highlights risks of rapid gains and losses, impacting liquidity and staker rewards in volatile markets. The post Trader nets over $1M on Papertrade’s launch, then loses $450K appeared first on Crypto Briefing .
Open source - TB
The BlockArticle ·
Trader nets $1.28 million on new 1,000x exchange Papertrade by moving Hyperliquid’s ETH prices The same wallet later lost $450,000 when 30 short positions were liquidated on Saturday night after staying open for more than three hours.
Open source - KO
kook@KookCapitalLLCPost on X ·
papertrade got drained for $1.28m in its first 8 hours the attacker is a hyperliquid whale with $13m all time pnl and $14b volume..... the oracle is the hyperliquid mid price push ethereum:native 10 bps on hyperliquid and 1000x pays you 72% of margin $1.28m out before most people finished reading the docs everyone farming $PAPER was the exit liquidity
Open source - WB
Wu Blockchain@WuBlockchainPost on X ·
Papertrade Faces Allegations of BBO Price Manipulation on HyperEVM X user @Dr_bobo54 alleged that two wallets exploited Papertrade’s pricing mechanism by using roughly $20 million orders on Hyperliquid to move ETH quotes by 10–20 basis points while holding much larger long positions on Papertrade. The HyperEVM-based perpetual platform reportedly uses the midpoint of Hyperliquid’s best bid and offer as its execution price, making it potentially sensitive to short-term BBO manipulation. Trader Rune noted that Papertrade’s own documentation lists BBO manipulation as an unresolved protocol risk. The allegations have not been independently verified, and Papertrade has not confirmed any losses.
Open source