Papertrade plans 1000x leverage launch after $85.3m deposits
Papertrade has scheduled its HyperEVM perpetuals exchange to begin trading on Oct. 10 with up to 1000x leverage, after DefiLlama tracked about $85.3 million in deposits ahead of the opening.
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Papertrade scheduled its HyperEVM perpetuals exchange to begin trading on Oct. 10 at 10 a.m. ET with up to 1000x leverage, after DefiLlama tracked about $85.3 million in deposits ahead of the opening. Deposits were paused 15 minutes before the bell to prioritize trading activity. The venue is not a wrapper around someone else’s book — it is a synthetic market that takes the other side of every position a trader opens.
The deposit figure is the headline, but it is the least informative number in the story, and the reason why is the most important thing to understand about this launch.
The $85.3 million is not a reserve
DefiLlama’s measurement combines customer trading balances with the protocol-owned pool, rather than counting only money available to pay profitable positions.
Papertrade’s own documentation is explicit that the house-side pool begins with no capital and receives funds as traders realize losses. Customer deposits therefore do not automatically become the reserve used to settle other participants’ gains.
So the $85.3 million is mostly traders’ own collateral sitting in their accounts. It is not a war chest backing the platform’s obligations. Reading it as “the exchange raised $85 million” would overstate the buffer by roughly the entire amount.
Winning does not mean getting paid
This is the mechanic that distinguishes this venue from a conventional perps exchange, and it deserves to be read carefully.
When a profitable position closes and the pool lacks enough money, the unpaid gain becomes a debt claim in a payout queue. Subsequent trading losses supply the funds needed to pay queued profits.
A Papertrade builder separately clarified that closing a winning position releases the trader’s original collateral. Only the profit enters the queue if the pool cannot cover it — separating access to the initial trading money from payment of the gain.
Put plainly: a trader can close a winning position, get their principal back, and still be waiting on the profit. Payment timing depends on available pool capital rather than on the trade being settled. That is a materially different product from what a trader expects when they see a perps exchange, and it is not a detail buried in a footnote — it is the settlement model.
How pricing and costs work
For entry and exit prices, Papertrade’s documentation specifies the midpoint between Hyperliquid’s best buy and sell offers. Positions remain synthetic contracts against Papertrade’s own pool; the protocol does not place a matching perpetual trade on Hyperliquid.
Using Hyperliquid’s price while being the counterparty itself is the structural detail. There is no external hedge absorbing the other side — the pool absorbs it, and the pool is funded by losers.
The cost model is asymmetric rather than fee-based. Trading carries no recurring funding payments, and quotes use the midpoint price subject to limits on market exposure. On profitable closes, the protocol reduces the gain through what its documentation calls an asymmetric impact haircut — taking a portion of the profit rather than charging a fee against the position’s full value. For losing positions, traders pay the realized loss without an additional charge, and those losses feed the same pool that settles winning trades and supports eligible distributions to PAPER stakers.
The result is a venue whose risks correlate in a way most traders do not model. Winners and losers draw from the same pool, and the timing of a winner’s payout depends on the flow of subsequent losses.
Access is deliberately narrowed at launch
Under its rollout plan, the exchange will initially accept trades through its frontend and approved transaction relayers. The team said direct public access to the trading contracts would remain restricted during that phase.
This is the part worth watching. Contract-level access restrictions are normal at launch, but they also mean depositors are trusting a frontend and a set of approved relayers rather than a permissionless market. Until direct access opens, the venue has the surface area of a custodial platform even though the balances sit in user accounts.
The comparison worth making
Within the same trading ecosystem, Payward has proposed a separate route for eligible American customers. As crypto.news reported on Sep. 16, the Kraken parent announced plans for regulated Hyperliquid perpetual markets using Bitnomial and Hyperliquid’s HIP-3 infrastructure. Under that proposal, Bitnomial Exchange would create and administer the markets, Bitnomial Clearinghouse would handle clearing and settlement, and customers would need approval through NinjaTrader Clearing plus inclusion on required access lists. Those proposed markets remained subject to regulatory approval.
Two routes into the same underlying ecosystem, with opposite structures: one synthetic, self-counterparty, and front-end-gated; the other administered and cleared through named regulated entities. The Papertrade launch puts the first model live with eight figures already deposited, which makes it a more useful test case than either side’s marketing would suggest.