Papertrade has scheduled its HyperEVM perpetuals exchange to begin trading on Oct. 10 with up to 1000x leverage, after DefiLlama tracked about $85.3 million in deposits ahead of the opening.
Summary
- $85.3 million in tracked deposits includes trader balances and the protocol’s house-side pool.
- Trading is scheduled for 10 a.m. ET, following a planned HyperEVM upgrade.
- Winning traders’ profits enter a payment queue when the pool cannot cover settlement.
- PAPER tokens mint from realized losses, with transfers between wallets initially disabled.
Papertrade said its website would open trading at 10 a.m. ET after the scheduled network upgrade, with deposits temporarily paused 15 minutes earlier to prioritize trading activity.
In the launch announcement, the team instructed users to fund their accounts before the opening:
“If you wish to participate in the launch you must predeposit.”
Under its rollout plan, the exchange will initially accept trades through its frontend and approved transaction relayers. The team said direct public access to the trading contracts would remain restricted during that phase.
Papertrade’s $85.3m deposits include customer balances
Ahead of the opening, DefiLlama tracked approximately $85.3 million deposited into Papertrade. Its measurement combines customer trading balances with the protocol-owned pool, rather than counting only money available to pay profitable positions.
According to Papertrade’s documentation, the house-side pool begins with no capital and receives funds as traders realize losses. Customer deposits therefore do not automatically become the reserve used to settle other participants’ gains.
When a profitable position closes, and the pool lacks enough money, the documentation says the unpaid gain becomes a debt claim in a payout queue. Subsequent trading losses supply the funds needed to pay queued profits.
A Papertrade builder separately clarified that closing a winning position releases the trader’s original collateral. Only the profit enters the queue if the pool cannot cover it, separating access to the initial trading money from payment of the gain.
Under the documented model, a trader can close a profitable position without receiving the entire profit immediately. The payment mechanism depends on available pool capital, while the trader’s original collateral becomes available again at close.
Trades use Hyperliquid prices without entering its order book
For entry and exit prices, Papertrade’s documentation specifies the midpoint between Hyperliquid’s best buy and sell offers. Positions remain synthetic contracts against Papertrade’s own pool; the protocol does not place a matching perpetual trade on Hyperliquid.
Although the venue uses Hyperliquid prices, the documentation identifies the protocol-owned pool as the counterparty to its traders. Papertrade’s settlement rules, including the profit queue, apply to those positions.
The documentation also describes trading without recurring funding payments. Quotes use the midpoint price, subject to limits on market exposure, while charges depend on whether the position closes with a gain or a loss.
On profitable closes, the protocol reduces the gain through what its documentation calls an asymmetric impact haircut. Instead of applying a trading fee to the position’s full value, the mechanism takes a portion of the profit.
For losing positions, the documentation says traders pay the realized loss without an additional charge. Those losses feed the same pool that settles winning trades and supports eligible distributions to PAPER stakers.
US perpetuals plans involve registered trading infrastructure
Within the same trading ecosystem, Payward has proposed a separate route for eligible American customers. As crypto.news reported on Sep. 16, the Kraken parent announced plans for regulated Hyperliquid perpetual markets using Bitnomial and Hyperliquid’s HIP-3 infrastructure.
Under Payward’s proposal, Bitnomial Exchange would create and administer the markets, while Bitnomial Clearinghouse would handle clearing and settlement. The company said customers would need approval through NinjaTrader Clearing and inclusion on the required access lists; the proposed markets remained subject to regulatory approval.
In an Aug. 31 report examining Hyperliquid’s US regulatory pathway, former SEC senior counsel Ashley Ebersole said offering offshore-style perpetuals to American retail customers would require regulators to establish how the contracts fit existing law.
According to Ebersole, commodity-linked perpetuals would probably fall primarily under CFTC oversight, while securities-linked contracts could involve SEC requirements. He said a compliant structure could require registrations covering the trading venue, clearing operations and intermediaries, alongside any rules or exemptions needed to accommodate the products.
PAPER issuance follows losses, with staking payouts restricted
For participants who lose money, Papertrade’s documentation describes PAPER as a token providing access to pool-related income. Supply starts at zero, and tokens mint from realized losses, with no allocation reserved for the team or venture investors.
While tracked pool capital remains below $2 million, the documentation sets the initial issuance rate at 100 PAPER for each dollar of eligible loss basis. The rate then declines along the protocol’s emissions curve.
At launch, the documentation permits staking and unstaking but disables transfers between wallets. The initial token functions therefore center on participation in the staking mechanism rather than transferable ownership between users.
Under the staking rules, eligible settled trades allocate a 1% share of realized profit and loss to stakers only when the payout queue is empty and the pool can cover the distribution. The documentation also permits further distributions from pool gains above its stated $5 million reward cap.
For administrative controls, Papertrade said its operators can pause new positions, freeze individual markets, and adjust fee parameters. Contract upgrades must pass through a seven-day timelock.
