Trader nets $1.28 million on new 1,000x exchange Papertrade by moving Hyperliquid's ETH prices

A trader made about $1.28 million on Papertrade, a perpetuals exchange built on Hyperliquid (HYPE) that offers up to 1,000x leverage on trades, within hours of its Saturday launch by moving ETH prices on Hyperliquid, according to The Block's review of Hyperliquid trading data and Papertrade's own account records. Papertrade said on Sunday it is tightening limits on open positions in response to the trades, first flagged by X users.

Papertrade went live at 10 a.m. ET Saturday on HyperEVM, the smart contract layer of Hyperliquid's blockchain. The high-leverage exchange prices every trade at the midpoint of Hyperliquid's current best bid and offer, and takes the other side of each position through a shared USDC pool funded by trader losses, while losing traders earn the protocol's PAPER token.

The wallet, 0x2025...840e, repeatedly opened large positions on Papertrade, then bought or sold thousands of ETH (ETH) on Hyperliquid, moving that reference price, before closing, according to Hyperliquid and Papertrade data reviewed by The Block. Between 6:01 p.m. and 6:02 p.m. ET on Saturday, it bought about 6,060 ETH on Hyperliquid as the price rose roughly $3, or 0.12%. At 6:03 p.m., it sold about 5,210 ETH and the price fell about $3.50.

At 1,000x leverage, a 0.1% price move equals the full margin on a position. The wallet traded about $231 million worth of ETH on Hyperliquid on Saturday evening and paid roughly $52,000 in trading fees, according to The Block’s analysis of its Hyperliquid trade history.

Papertrade's portfolio page for the wallet shows $1.28 million in profit on $3.18 billion in volume. The wallet withdrew about $2.48 million from Papertrade on Saturday against $1.2 million in deposits, including a single $1.54 million withdrawal at 6:06 p.m. ET. 

At 7:13 p.m. ET, the wallet opened 30 ETH shorts at 660x leverage with a combined notional value of $297 million, then sold about 6,590 ETH on Hyperliquid over the next three minutes, pushing the price down to $2,504.40.

Curiously, while the wallet's initial trades lasted only minutes, these shorts stayed open for more than three hours and were only liquidated at 10:31 p.m. ET at $2,509.95, for a loss of $450,000. Those losses minted about 17.6 million PAPER to the wallet, according to Papertrade's interface.

X user Boblob flagged the activity Saturday evening, writing that two wallets were moving ETH on Hyperliquid with trades of about $20 million each. X user butler published the 0x2025 address and a breakdown of its trades later that night, speculating that Papertrade could have blocked the wallet from closing the shorts to prevent additional trades. 

Over its lifetime, the wallet has logged about $14.2 billion in volume and $13.1 million in profit on Hyperliquid, according to Hyperliquid data. It began trading on Hyperliquid in February 2025 with about $2 million in deposits, and in the week before Papertrade’s launch it traded every day across ETH, ZEC, NEAR and perpetual contracts tied to stocks such as CrowdStrike and Intel.

Tighter caps

In an X post on Sunday morning, Papertrade said the overnight manipulation attempts on BTC and ETH were "not an oversight in the mechanism design we spent six months working on." It said the attempts were possible because it set open interest caps loosely to handle launch demand, and that it has begun tightening them both onchain and at the relayer level. Papertrade also said its launch queue made the timing of opens and closes unpredictable. 

Papertrade said the trader who profited overnight later gave almost all of the gains back to its pool through new accounts. It also said some users agreed to reverse manipulated trades in exchange for keeping the PAPER they had earned. The Block could not verify either claim, and the 0x2025 wallet's withdrawals from Papertrade still exceed its deposits by about $1.28 million,according to Papertrade’s records.

Papertrade said its liquidity pool holds $5 million and that it has paid $25 million to PAPER stakers. A chart in the post shows the pool's balance falling from about $5 million to about $2.4 million before recovering. The protocol was co-founded by two traders who go by Jez and Blurr.

Hyperliquid's own liquidity vault has posted losses from large single-trader positions before. Its HLP vault lost about $4 million after a whale's leveraged ETH position was liquidated in March 2025, and about $4.9 million on a POPCAT position in November 2025, when Hyperliquid paused deposits and withdrawals.

The Block has reached out to Papertrade and Hyperliquid for comment.