Papertrade open interest falls 93.7% after debut weekend
The Hyperliquid-based perpetuals DEX saw open interest drop from $11bn to $693m in about 24 hours, while deposits fell by $48m, Bitcoin.com News reports.
Why it matters: The episode shows how quickly activity and deposits can drain from a new high-leverage perps venue, and highlights manipulation risks in pricing data taken from another DEX.
Key points
- Open interest fell 93.7% from $11bn to $693m in roughly 24 hours, with only $9.17m backing outstanding positions.
- Total value locked dropped from $118m to $70m, a $48m decline, and later reached $67m according to paperdash.xyz.
- Papertrade said some traders tried to manipulate Bitcoin and ethereum pricing via Hyperliquid's best bid and offer data.
Papertrade, a newly launched perpetuals DEX built on Hyperliquid, has seen its open interest fall 93.7% over about 24 hours, Bitcoin.com News reports. The figure dropped from $11bn to $693m, while only $9.17m was backing those outstanding positions as of Sunday.
The platform's total value locked also fell sharply, shedding $48m to take deposits from $118m to $70m. By the end of the report, paperdash.xyz data put TVL even lower at $67m. The outlet had examined Papertrade on Saturday, noting its 1,000x leverage and an operating model some observers likened to a casino.
Complaints and manipulation
Papertrade also answered user complaints after its first full day of trading. Some traders said smaller transactions were not given the same priority as larger orders; the project said prioritising every order would let thousands of tiny orders overwhelm the system. It also acknowledged attempts by traders to manipulate Bitcoin and ethereum prices by distorting the best bid and offer data it takes from Hyperliquid to value positions.
Papertrade said such attacks were anticipated during six months of building its trading infrastructure. The sharp fall in activity leaves open the question of whether the exchange can hold lasting interest after its explosive debut.
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