Wallet Made $1.28M on Papertrade, Lost $450K on Liquidated Shorts

A cryptocurrency wallet netted about $1.28 million from Papertrade within hours of the exchange’s launch by moving ETH prices on Hyperliquid while holding large positions on Papertrade, according to Coincentral. The same wallet lost $450,000 when 30 short positions were liquidated on Saturday night, the report said.

Papertrade is a new on-chain exchange on HyperEVM, the smart contract layer of Hyperliquid’s blockchain, that went live at 10 a.m. ET on Saturday and offers up to 1,000x leverage. It prices every trade at the midpoint of Hyperliquid’s best bid and offer. Onchain data shows the wallet shifted ETH’s reference price on Hyperliquid while its positions sat on Papertrade.

Key facts

• The wallet’s profit on Papertrade was roughly $1.28 million on $3.18 billion in volume, per Coincentral.
• Between 6:01 p.m. and 6:02 p.m. ET it bought about 6,060 ETH, lifting the price roughly $3; at 6:03 p.m. it sold about 5,210 ETH and the price fell about $3.50.
• The wallet traded about $231 million of ETH on Hyperliquid that evening and paid about $52,000 in fees.
• At 7:13 p.m. ET it opened 30 ETH shorts at 660x leverage worth $297 million combined; those were liquidated at 10:31 p.m. ET, causing a $450,000 loss and minting about 17.6 million PAPER tokens to the wallet.
• The wallet has logged about $14.2 billion in volume and $13.1 million in profit on Hyperliquid since February 2025.

Two very different ways to clear $1 million in a day

The Papertrade activity took place the same weekend that a separate wallet cleared seven figures on Hyperliquid without moving any price. Finbold reported that a newly created wallet opened a 3x isolated long on 24.42 million STRK, Starknet’s native token, on October 10 with a notional value of roughly $2.9 million. The position’s unrealized profit reached about $1.05 million, lifting its total value to around $4 million, according to onchain data Finbold sourced from Lookonchain on October 11.

STRK led the market that weekend, gaining more than 50% in 24 hours and roughly doubling over the prior week, with an entry near $0.076 and trades between $0.11 and $0.12. Finbold attributed the rally primarily to statements from StarkWare CEO Eli Ben-Sasson on October 8 about considering a transition from Ethereum Layer 2 to an independent Layer 1 with full quantum resistance by 2027. Finbold also noted an October 5 mainnet upgrade, a Bitcoin bridging incentive program, and analyst warnings about elevated wash-trading volumes and a token unlock equivalent to roughly 1.27% of supply in mid-October.

Why it matters

The two trades cut against each other as evidence about market integrity. The STRK position was a directional bet that paid off on a real catalyst; the Papertrade wallet’s gains came from trading against a reference price it was actively pushing around. That distinction matters for a venue that launched with 1,000x leverage, where a 0.1% move equals the full margin on a position. Papertrade’s liquidity pool fell from about $5 million to about $2.4 million before recovering, and launch day brought $14.4 billion in notional volume and $3 billion in BTC open interest, with pre-deposits topping $137 million from more than 11,000 addresses.

Papertrade’s response and the open questions

Papertrade said on Sunday that the activity was possible because it set open interest caps loosely to handle launch demand, and that it has begun tightening them onchain and at the relayer level. The exchange said the trader later returned almost all gains to its pool through new accounts, and that some users agreed to reverse manipulated trades. Coincentral reported that neither claim could be verified and that the wallet’s withdrawals still exceed its deposits by about $1.28 million. Net trader losses on launch day were estimated at $18 million to $30 million. The exchange also said its pool holds $5 million and that it has paid $25 million to PAPER stakers.

What to watch

Papertrade was still tightening caps as of Sunday. The next signals are how firmly those caps are enforced at the relayer level, whether the return of gains is confirmed onchain, and how the wallet’s open interest moves on Hyperliquid are read by other venues pricing off the same reference feed.

Nothing here is financial advice. Leveraged and perpetual crypto markets are volatile, and positions can be liquidated in full.

Disclaimer: This article is for information only and is not investment, financial or trading advice. Cryptocurrency prices are highly volatile. Always do your own research.

Sources: CoinCentral, Finbold