Papertrade loses 94% of its open interest but only 41% of its deposits over a weekend

Deposits were still leaving as the report closed. By then paperdash.xyz put Papertrade's total value locked at $67 million ^[7], which is 43.2% below the $118 million it showed on Saturday ^[11][4].

In our view the fragile figure was the notional one. A platform that offers 1,000x leverage ^[3] can post an $11 billion open interest number ^[1] on a small deposit base, and it can lose most of that number in a day without its depositors leaving in proportion. The counter-thesis is that cash is the slower leak. If TVL keeps falling toward zero while open interest holds near $693 million ^[1], the brittleness shows up in deposits too. If TVL settles near $67 million ^[7] and open interest rebuilds, the Sunday figure was a launch spike unwinding and the cash never left in earnest.

The first full day of trading also brought complaints about order priority. According to Bitcoin.com News, some traders were frustrated that smaller transactions did not get the same priority as larger orders ^[5]. Papertrade defended the approach, saying that indiscriminate prioritization would let thousands of tiny orders overwhelm the system and worsen processing delays ^[6]. On manipulation, Papertrade contends it anticipated such attacks and accounted for them during six months spent building its trading infrastructure ^[14]. Its answer to both complaints was to defend the design.

The evidence is one exchange over one weekend, in one outlet's figures. Papertrade is a newly launched perpetuals exchange built on Hyperliquid ^[8], and the report does not say whether the lost open interest was closed by traders or liquidated, what the $9.17 million behind the remaining positions consists of ^[12], or how any other Hyperliquid-built venue behaved in its first days.