TLDR
- A wallet made about $1.28 million on new exchange Papertrade within hours of its Saturday launch by moving ETH prices on Hyperliquid.
- The same wallet lost $450,000 when 30 short positions were liquidated on Saturday night.
- Papertrade said it is tightening open interest caps after what it called manipulation attempts.
- Launch day saw $14.4 billion in volume and over $137 million in pre-deposits.
- Papertrade’s liquidity pool fell from about $5 million to about $2.4 million before recovering.
A trader made about $1.28 million on Papertrade within hours of its launch. Papertrade is a new exchange built on Hyperliquid that offers up to 1,000x leverage. Onchain data shows the wallet moved ETH prices on Hyperliquid while holding large positions on Papertrade.
🚀 Papertrade Hits $80B in Nominal Volume in Just 1 Hour
.@papertrade_xyz, an on-chain synthetic perpetual exchange on HyperEVM, saw a massive surge in activity, surpassing $80B in nominal trading volume within its first hour
But there's a twist:
• $4.73M in cumulative user… pic.twitter.com/swE63VXoQc— Hyperliquid Daily (@HYPERDailyTK) October 12, 2026
Papertrade went live at 10 a.m. ET on Saturday on HyperEVM, the smart contract layer of Hyperliquid’s blockchain. It prices every trade at the midpoint of Hyperliquid’s best bid and offer.
thank you everyone for your participation and support through papertrade's launch.
we flipped the stock market’s volume in the first 6 hours. one day after launch, papertrade is a fully working 1000x exchange with 5m in the LP and has paid out 25M to stakers.
addressing two… pic.twitter.com/zkmGIqZ6DE
— papertrade.xyz (@papertrade_xyz) October 11, 2026
How the trades worked
The wallet repeatedly opened large Papertrade positions. It then bought or sold thousands of ETH on Hyperliquid to shift the reference price before closing.
Between 6:01 p.m. and 6:02 p.m. ET, it bought about 6,060 ETH, and the price rose roughly $3. At 6:03 p.m., it sold about 5,210 ETH, and the price fell about $3.50.
At 1,000x leverage, a 0.1% price move equals the full margin on a position. The wallet traded about $231 million worth of ETH on Hyperliquid that evening. It paid roughly $52,000 in fees.
Papertrade’s portfolio page shows $1.28 million in profit on $3.18 billion in volume. The wallet withdrew about $2.48 million against $1.2 million in deposits.
The losing shorts
At 7:13 p.m. ET, the wallet opened 30 ETH shorts at 660x leverage. Their combined value was $297 million. It then sold about 6,590 ETH on Hyperliquid, pushing the price down to $2,504.40.
These shorts stayed open for more than three hours. They were liquidated at 10:31 p.m. ET, causing a $450,000 loss. The losses minted about 17.6 million PAPER tokens to the wallet.
X users flagged the activity on Saturday evening. The wallet has logged about $14.2 billion in volume and $13.1 million in profit on Hyperliquid since February 2025.
Papertrade responds
Papertrade said on Sunday that the attempts were possible because it set open interest caps loosely to handle launch demand. It has begun tightening them onchain and at the relayer level.
The exchange said the trader later returned almost all gains to its pool through new accounts. It also said some users agreed to reverse manipulated trades. The Block could not verify either claim, and the wallet’s withdrawals still exceed its deposits by about $1.28 million.
Papertrade said its pool holds $5 million and that it has paid $25 million to PAPER stakers. A chart shows the pool falling to about $2.4 million before recovering.
Launch day brought $14.4 billion in notional volume and $3 billion in BTC open interest. Pre-deposits topped $137 million from more than 11,000 addresses. Net trader losses were estimated at $18 million to $30 million.
Hyperliquid’s HLP vault lost about $4.9 million on a POPCAT position in November 2025. On Sunday, Papertrade said it was still tightening its caps.
