How Does PaperTrade Offer 1,000x Leverage With No Fees?

PaperTrade is a fully onchain, high-leverage trading venue on HyperEVM that lets users trade only Bitcoin and ETH with up to 1,000x leverage, while avoiding traditional order-book mechanics. Jason Pagoulatos says the platform takes the other side of each trade against a house pool, which is why it can advertise no funding rate, no slippage, and effectively no fees. Losses fund the pool, and losing traders mint PAPER as a rebate token that can later be staked for USDC yield.

Pagoulatos compares the model to old bucket shops and says the launch was intentionally framed around the prior year’s liquidation event, when traders were suddenly wiped out. He says the economics also create queue risk: if the pool runs short, profitable traders may have to wait until enough losses arrive to pay them out. That structure helped PaperTrade draw about $140 million in pre-deposits and later pay out tens of millions to PAPER holders.

The conversation then turns to what broke after launch. Pagoulatos says HyperEVM’s throughput caused close-position queues, and he describes a more serious problem: traders could move the underlying Hyperliquid price feed with large orders and affect PaperTrade’s settlement prices. He says the team responded by manually locking positions on the first day and later changed several rules retroactively.