Papertrade and Hyperliquid: what happened in the reported ETH trade, and what the reports say about the profit and response.

Papertrade and Hyperliquid: what happened in the reported ETH trade, and what the reports say about the profit and response.

A trader reportedly made about $1.28 million on Papertrade by taking highly leveraged ETH positions and trading ETH on Hyperliquid to move the price Papertrade used. Papertrade said it was tightening open interest caps. It also said the trader returned nearly all the gains through new accounts, but The Block could not confirm that; its review found withdrawals still exceeded deposits by $1.28 million. The Block’s report · The Block’s post

How the trade reportedly worked

Papertrade’s trades used the midpoint of Hyperliquid’s best bid and ask. The report says the trader opened large Papertrade positions, then bought or sold ETH on Hyperliquid to shift that reference price. The trader traded about $231 million in ETH there and paid about $52,000 in fees. At 1,000x leverage, a 0.1% price move equals the initial margin. The Block’s report

Response and disputed recovery

Papertrade said it was tightening open interest caps after the activity. Its claim that the trader returned nearly all the gains remains unverified in the report; the reported deposit and withdrawal records show a net $1.28 million withdrawn. The Block’s report The supplied reports do not state the revised caps or when they took effect.

The Block report · The Block post · Papertrade announcement · Earlier launch details