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Papertrade keeps PAPER token non-transferable citing perp attack risks

Papertrade has decided to keep its PAPER token non-transferable for now due to perpetual attack concerns, rolling out rule changes that triggered immediate perp delistings and heavy balance-sheet swings for large holders.

Graphic comparing Machi Big Brother's Papertrade balance from a $1.3 million profit to a $432,000 loss after PAPER perp pricing was removed.
Image: @jussy_world

Papertrade announced that it will keep the PAPER token non-transferable for the time being, citing the threat of perpetual attacks and manipulation risks. The decision highlights ongoing trade-offs between protocol stability and token utility, directly affecting market dynamics and trader expectations, according to Crypto Briefing.[2][1]

The protocol's move was accompanied by several significant rule revisions. According to jussy on X, Papertrade introduced higher transaction fees aimed at bots and scalpers alongside a new minting system designed to slowly dilute older holders. Under this setup, every $10 million lost by traders expands PAPER supply by 1%, lowering stakers' proportionate share of USDC rewards unless they mint additional tokens.[3]

Derivative platforms reacted almost immediately to the policy updates. Paragon closed its PAPER perpetual contract approximately one minute after Papertrade's announcement, and Aster delisted the market altogether. The sudden removal of external perp pricing heavily impacted high-profile traders such as Machi Big Brother, who saw his Papertrade balance swing from a $1.3 million profit—bolstered by 65 million PAPER previously valued at $1.7 million—to a $432,000 net loss, while remaining long on ETH at 600x leverage.[3]

Key facts

  • Papertrade decided to keep the PAPER token non-transferable for the time being, citing risks of perpetual attacks and manipulation.
  • Paragon shut its PAPER perp market roughly one minute after the announcement, and Aster delisted the contract.
  • Papertrade introduced higher fees for bots and scalpers and updated token minting rules intended to slowly dilute earlier holders.
  • Under the new mechanics, $10 million in trader losses increases the PAPER supply by 1%, cutting a holder's share of USDC staking rewards by 1% unless they mint more.
  • Machi Big Brother swung from a $1.3 million profit to a $432,000 loss on Papertrade after PAPER perp pricing disappeared, while holding a 600x long position on ETH.

Sources · 3 sources

  1. CB

    Crypto BriefingArticle ·

    Papertrade keeps PAPER token non-transferable, citing manipulation risks Papertrade's decision to keep PAPER non-transferable highlights the challenges of balancing token utility with protocol stability, impacting trader expectations and market dynamics. The post Papertrade keeps PAPER token non-transferable, citing manipulation risks appeared first on Crypto Briefing .

    Open source
  2. AN

    Aggr News@AggrNewsPost on X ·

    *PAPERTRADE TO KEEP $PAPER TOKEN NON-TRANSFERABLE FOR NOW, CITES PERP ATTACK RISKS: X

    Open source
  3. JU

    jussy@jussy_worldPost on X ·

    Yesterday @machibigbrother was up $1.3M on papertrade > Lost $844K trading > Got $412K USDC from staking > Farmed 65M $PAPER, worth $1.7M by the price on perps Then papertrade dropped new rules: → PAPER won't be transferable → Paragon shut the perp 1 min later, Aster delisted it → New minting will "slowly dilute out older holders" → Higher fees for scalpers & bots If traders lose $10M, supply grows 1%, so Machi’s share of USDC rewards drops 1%, unless he mints more He is down $432K and still longing ETH at 600x 😭

    Open source