Papertrade books $37 million in four days by taking the other side of 1000x BTC and ETH bets

Cryptopolitan's comparison sets four days of Papertrade against seven days of Pump.fun and Hyperliquid ^[2][3]. On a per-day basis, $37.03 million over four days is about $9.26 million a day ^[14], while the pair's combined $30.62 million ^[13] over seven days is about $4.37 million a day ^[15]. That is a pace of roughly 2.1 times ^[16], and a lead of 21% on raw totals ^[17]. Cryptopolitan does not say whether DefiLlama's Papertrade figure is net of what the pool paid to winning traders.

Cryptopolitan's Anush Jafer wrote: "The $37 million figure is mostly a record of how much users have lost since Saturday." ^[21] The pool takes the other side of every bet ^[5], and at 1000x leverage a $100 deposit becomes a $100,000 position, so a 0.1% move the wrong way can wipe it out ^[9]. The same leverage turns a 0.12% move in the trader's favor into a 120% return on the deposit ^[18].

One wallet shows the winning side. Wallet 0x2025...840e bought about 6,060 ETH on Hyperliquid between 6:01 and 6:02 PM ET on October 10 while holding leveraged longs on Papertrade ^[23]. Papertrade has no order book and uses the midpoint of Hyperliquid's best bid and ask, so when Hyperliquid's price moves, Papertrade's moves with it, according to Cryptopolitan ^[10]. ETH rose about $3, or 0.12% ^[24]. The payout was $1.28 million ^[27] against roughly $52,000 in Hyperliquid fees ^[26], about 25 to 1 ^[29], and equal to 3.5% of the $37.03 million revenue total ^[30].

The reported figures do not fully reconcile. A $3 move that equals 0.12% implies ETH near $2,500 ^[19], which puts 6,060 ETH at about $15 million ^[20], against the $231 million of ETH on which the fees were charged ^[26]. The larger volume presumably includes the later sale and the flip to shorts ^[25].

PAPER has no market price. The docs allocate no tokens to a team, VC or airdrop, so every PAPER in existence went to a trader for losing ^[7]. Tokens cannot currently be sold or sent between wallets ^[8], and the holder's claim is on pool surplus above $5 million ^[8]. That surplus exists only if new losses outrun winners' payouts. When the pool cannot cover a win, Papertrade queues the unpaid profit and settles it from future traders' losses ^[12].

Either losses keep arriving near $9 million a day ^[14], the pool clears $5 million, and stakers are paid. Or the launch crowd thins and the queue of unpaid winners grows ^[12]. Or another trader repeats the Hyperliquid-price play faster than Papertrade's cut to open position limits can stop it ^[28].

We think $9.26 million a day ^[14] is a launch-week rate of user losses, and we'd expect it to fall as the PAPER mint rate drops once the pool passes $2 million ^[11] and as the tighter limits reduce the leveraged exposure that produced the wallet's payout ^[28]. We would be wrong if daily revenue stays near that level after launch week while the pool pays every winner without queueing.