Can you add margin to an open Papertrade position?

No. Positions are fixed once opened, so margin cannot be topped up. To get more room, close the position and reopen it with a larger margin. A position that crosses its displayed bust price is liquidated and forfeits its whole isolated margin.

Can you transfer PAPER to another wallet?

Not at launch. The docs say PAPER cannot be moved between wallets for now, but minting, staking, unstaking and claims all work. Staked PAPER earns USDC from part of the protocol's fees and from LP surplus beyond the staker reward cap.

Can you build your own Papertrade frontend?

Yes, but it must submit trades through Papertrade's relayer, which batches the signed intents onchain. The contracts do not accept opens, closes or staking actions from anyone else, and withdrawals still need the user's own wallet signature. An approved builder earns a fee on closes.

What happens if the Papertrade LP becomes insolvent?

The LP issues debt into a queue. That queue is paid as soon as the LP receives funds from another trader's loss. The docs say PAPER mints fastest while the LP is insolvent, and staker fees are paid only once the queue is cleared and the LP can afford them.

Can Papertrade list markets that Hyperliquid does not trade?

No. Prices come from Hyperliquid's own order book, so only markets that already exist there can be listed. The docs say the protocol can list any Hyperliquid perpetual, HIP-3 markets included, and that the contract owner adds new markets. BTC and ETH are the current ones.

Papertrade: how the onchain perps exchange and PAPER work

Papertrade is an onchain exchange for perpetual futures, with its smart contracts deployed on Hyperliquid's HyperEVM layer. Traders open and close synthetic positions against a shared liquidity pool (the LP) rather than an orderbook, and the exchange's token, PAPER, is minted only to traders who close at a loss or get liquidated. As of 28 October 2026, it lists BTC and ETH.

What is Papertrade?

Papertrade is a perpetuals exchange in which the protocol's own pool is the other side of every trade. Its documentation describes it as fair-launched and fully onchain, and the main site, papertrade.xyz, is the first canonical frontend. Its stated features are one-click buy and sell, zero slippage, no funding costs, no spread and a self-bootstrapping LP. The site also shows a mobile app as coming soon.

The exchange lists BTC and ETH, both with up to 1000× leverage, and a single position can reach a notional of $10M. The protocol can list any perpetual contract that exists on Hyperliquid, HIP-3 markets included, and the contract owner adds new markets. It cannot list anything Hyperliquid does not already trade.

How does Papertrade work?

Papertrade works by reading Hyperliquid's best bid and offer (BBO) midpoint from inside a contract and settling each trade against the LP at that price. No perpetual contracts are traded on Hyperliquid itself. The pricing design uses a precompile, so there is no off-chain price feed and no price signer.

Opening: the contract locks the current midpoint as your entry price.
Closing: it reads the midpoint again and settles the profit or loss directly with the LP.
No orderbook: there is no matching engine and no other counterparty.
Costs the docs rule out: no spread, no slippage, no funding and no gas charged to the user.
Fixed positions: you cannot add margin to an open position. To give it more room, close it and reopen with more margin.
Liquidation: each position shows a bust price, and crossing it forfeits the full isolated margin.

If the LP runs out of funds, it issues debt into a queue. The queue is paid as soon as the LP receives money from another trader's loss.

Trading goes through Papertrade's relayer, which batches signed intents onchain. A third-party frontend can be built, but it must submit through that relayer, and withdrawals still need your real wallet signature.

How do you earn PAPER?

Closing a trade at a loss, or being liquidated, is what mints PAPER to a trader. There is no way to deposit into the LP directly, so trading losses are the only path to PAPER. The docs call it a consolation claim on future protocol value.

PAPER launched with an empty supply. Nothing was pre-minted, and neither the team nor venture investors hold an allocation. There is no airdrop and no vesting schedule. Because no tokens are handed out for free, it is not a claimable drop of the kind described in the crypto airdrop guide.

The amount minted depends on a curve. Each $1 of qualifying loss adds a slice of the existing supply, so issuance is proportional to what already exists. When the LP sits under zero, the portion of a loss that helps refill it is weighted up to 5×, and that bonus builds across the first 3 days below zero.

At launch PAPER cannot be moved between wallets. Minting, staking, unstaking and claims work. Staked PAPER earns USDC from two streams:

Half of the protocol's fees, split among stakers in proportion to their stake.
LP surplus above a $5M staker reward cap.

Stakers are paid only once the queue is cleared and the LP has enough to cover the amount.

What changed on 21 October 2026?

Papertrade moved to a new contract set on 21 October 2026, and its docs now describe that set. The earlier set ran from 7 October 2026 and its docs remain online under a separate address. Its figures for PAPER no longer apply.

The clearest difference is the mint rate. Contract set 1 minted a flat 100 PAPER per $1 of loss while tracked LP was below $2M, then decayed it. The current docs instead describe a share of the existing supply per $1 of loss, with the bonus for refilling a negative LP. Anyone reading older write-ups should check them against the current docs and the PAPER overview.

What fees and risks does Papertrade publish?

Papertrade publishes no trading fee on position size, and takes its cut from winning closes only. Losses pay nothing beyond the loss itself. A losing close or liquidation also carries a 2% fee, but the LP's side absorbs it, so your loss stays the same size, and it applies only when no payouts are queued and the LP has the funds.

Step on a winning close	What is published
Deadband	A win smaller than 0.2 bps of price pays nothing; larger wins are trimmed by that amount first
Asymmetric impact	A scaling that takes the most from tiny gains and less as the price move widens
Win fee	2% of the scaled gain
Builder fee	0.5% of profit, only when closing through an approved builder's frontend

The asymmetric impact page adds that retention tops out at 90% of the raw gain ahead of the win fee. After the fee the trader receives 98%, or 97.5% when a builder fee also applies. The builder codes page says no builder is named on papertrade.xyz, so a close there carries no builder fee.

The risk page names its main risk as manipulation of Hyperliquid's BBO. The oracle rejects a zero or crossed book, but it has no deviation or time-weighted check, so a distorted yet valid quote can be accepted. Open-interest caps and the deadband limit some of the exposure without proving manipulation unprofitable.

Admin powers are also published. A pause guardian can retire a market, after which existing positions close at a frozen price. The contracts are proxied, so the owner can in principle rewrite what they do.