Viewpoint: Papertrade Suspected of Being Exploited for Price Manipulation by Two Addresses, Protocol Has Obvious Vulnerabilities

According to Butler’s monitoring, Papertrade was exploited by an address to earn around $1.28 million in profits just roughly 8 hours after its launch. The same trader has accumulated over $13 million in historical profits on Hyperliquid, with a trading volume of $14 billion. Since Papertrade prices its trades based on Hyperliquid’s real-time ETH price, the attacker repeatedly opened large long and short positions on Papertrade while trading ETH on Hyperliquid, briefly pushing prices up or down before closing positions for gains. Data shows the trader executed a total of 305 trades, 296 of which were profitable, giving a win rate of approximately 97%. The average holding time was just 98 seconds, with cumulative trading profits peaking at $1.73 million. However, the attacker later opened 30 short positions on Papertrade at $2507.35, with a notional value of around $297 million, and sold roughly 6,600 ETH on Hyperliquid to drive the price down to $2504.4, but this attempt to close the positions failed. Afterward, ETH’s price rose to $2509.95, triggering full liquidation of the 30 short positions, resulting in a loss of roughly $450,000. The attacker ultimately netted approximately $1.28 million in profits. The Papertrade team may have curbed the attack by blocking the attacker’s position closures, but this is only speculation and has not been confirmed. Analysts noted that if the platform continues to directly use Hyperliquid’s BBO (Best Bid Offer) as its pricing basis, underlying manipulation risks will remain. They recommend adopting Hyperliquid’s official oracle price, which aggregates quotes from multiple trading platforms, to reduce risks from manipulation of a single order book.

According to TradingBeats' monitoring, since Papertrade opened trading at 22:00 on October 10, a total of 7,962 addresses have opened positions, with 5,836 of them having used 1000x leverage, accounting for roughly 73.3%. These addresses cumulatively opened 61,222 1000x leveraged positions, and the high leverage risk has materialized rapidly. Of these, 4,395 addresses have experienced at least one liquidation of a 1000x position, making up 75.3% of all addresses that used 1000x leverage; a total of 12,657 1000x leveraged positions were liquidated, resulting in isolated margin losses of approximately $20.0771 million, including around $8.0006 million in BTC positions and $12.0764 million in ETH positions. Over the same period, 4,861 addresses across the entire platform had positions liquidated, with a total of 14,158 liquidated positions and isolated margin losses of about $23.1162 million. 1000x positions accounted for roughly 89.4% of total liquidation counts and 86.9% of total liquidation margin losses. The median holding time of liquidated 1000x positions from opening to liquidation was just 7 minutes and 35 seconds. The official noted that a 1000x leveraged position may trigger liquidation and lead to the loss of the entire isolated margin if a reverse price movement of approximately 0.052% occurs.

According to YuEmber monitoring, a new wallet spent 440,000 USDC to go long on STRK on Hyperliquid yesterday morning. STRK subsequently rose more than 50%, generating an unrealized profit of $850,000 for the wallet within a day.

Filecoin is set to conclude its six-year genesis token vesting plan, ending the regular annual release of around 68.3 million FIL, with block rewards becoming the primary ongoing source of its new token supply. Calculations based on Lotus supply accounting code and the latest mining data from Filfox show the total annual new token supply from vesting releases and block rewards is projected to drop by roughly 77%, from 88.9 million FIL per year to 20.6 million FIL. The post-vesting data is annualized from the past 24 hours of output, intended solely to compare current annualized supply rates and not a forecast of next year’s block rewards. Per Filecoin’s published token allocation plan, Protocol Labs (including its team and contributors) was allocated 300 million FIL, while the Filecoin Foundation received 100 million FIL. The combined six-year allocation plan releases around 66.7 million FIL annually. Lotus’ supply accounting code also includes an additional 9.8 million FIL in the same six-year vesting category, bringing the annual planned release to roughly 68.3 million FIL. The relevant code calculates the vesting plan starting from the network’s liftoff epoch, divided into six cycles of 365 days each. Thus, based on Filecoin mainnet parameters and recorded genesis block data, the plan is set to conclude on October 14, 2026.

According to monitoring by TradingBeats and DefiLlama data, Papertrade’s Total Value Locked (TVL) is approximately $96 million, up 64.26% in 24 hours, ranking fifth among HyperEVM applications. By sub-protocol statistics, it places sixth in the cross-chain derivatives category. As of press time, Papertrade’s official data shows its nominal trading volume over the past 24 hours reached around $596.283 billion (including position opening, voluntary closing and liquidation). The protocol’s current open interest (nominal) stands at roughly $1.979 billion, with used margin of about $17.3766 million in the same period, meaning nominal positions are approximately 114 times the margin. Trading leaderboards indicate that all 15 top single-trade profit positions over the past 24 hours are ETH long positions, involving 11 accounts with total profits of around $792,300. Entry prices are concentrated between $2,495.65 and $2,502.95, while exit prices range from $2,508.75 to $2,516.05. Among these, 13 positions were held for less than an hour, and 5 used 1000x leverage. Protocol statistics show all traders have collectively realized a net trading loss of about $30.24 million. Notably, the top-profit account currently holds a $10 million nominal long position with $10,000 in margin, held for 31 minutes. ETH rose from $2,495.65 to $2,515.15 (a gain of only ~0.78%), yet the position generated a profit of ~$66,400, translating to a margin return of ~664.5%. It is reported that Papertrade is a synthetic perpetual protocol running on HyperEVM, supporting up to 1000x leverage, with trades settled directly against the protocol’s liquidity pool.

According to HTX market data, AERO is trading at $0.9422, up 17.29% in 24 hours; VELODROME is at $0.04087, with a 24-hour gain of 16.74%. Aerodrome and Velodrome will merge into a unified cross-chain decentralized exchange (DEX) named Aero, scheduled to launch on October 21. The merged platform will support Base, Ethereum Mainnet, OP, Arc, Ink, plus new chains Robinhood Chain and Arbitrum. AERO and VELO tokens will be consolidated into a single AERO token, with prior revenue allocated at approximately 94.5% to AERO holders and 5.5% to VELO holders. Communities and trading platforms will also migrate to the new Aero.