Trader Earns $1.28 Million on Papertrade Launch by Moving Ethereum Prices on Hyperliquid
A single wallet made approximately $1.28 million in profit on new perpetuals trading platform Papertrade within hours of its launch. The trader executed large trades on Hyperliquid (HYPE) to briefly shift Ethereum (ETH) reference prices, allowing them to extract gains from Papertrade's liquidity pool through high-leverage trades.
Papertrade launched on HyperEVM offering up to 1,000x leverage, pricing contracts at the midpoint of Hyperliquid's bid and offer spreads. By opening massive leveraged positions on Papertrade and subsequently buying or selling thousands of ETH tokens on Hyperliquid, the wallet moved the market price to trigger substantial profits against Papertrade's counterparty pool. The address completed over $231 million in ETH volume on Hyperliquid during the evening, incurring $52,000 in transaction fees.
In response to the trading activity, Papertrade announced it is tightening open interest caps both onchain and at the relayer level. Investors will be monitoring whether tighter exposure limits stabilize the platform's liquidity pool, which experienced significant balance fluctuations during the incident.
Key points
- A trader generated $1.28 million in profit on new leverage exchange Papertrade within hours of its weekend launch.
- The trader manipulated reference prices on Hyperliquid (HYPE) by buying and selling thousands of Ethereum (ETH) tokens.
- Papertrade offers up to 1,000x leverage and uses Hyperliquid midpoint pricing to settle trades against a shared liquidity pool.
- Papertrade announced it is tightening open interest limits onchain and at the relayer level to prevent future market manipulation.
Written by our AI from expert market sources across the web. It can contain mistakes: check the facts before acting on them. Write-ups powered by the free AI API at FreeTheAI.org
How we writeDisclaimerQuestions and answers
How did a trader make $1.28 million on Papertrade?
The trader opened high-leverage positions on Papertrade while simultaneously buying or selling large volumes of Ethereum on Hyperliquid to move the reference price in their favor.
How is Papertrade responding to price manipulation?
Papertrade announced it is tightening open interest caps onchain and at the relayer level to restrict position sizes and prevent traders from exploiting pricing mechanisms.
What is the leverage limit on Papertrade?
Papertrade offers up to 1,000x leverage on perpetual contracts using pricing derived from Hyperliquid midpoint bid and ask spreads.