Papertrade's Wild Weekend Ends With 93.7% Open Interest Wipeout

Trading Complaints and Price Manipulation Attempts Test Papertrade

After its first full day of trading, Papertrade responded to a series of user grievances concerning the platform’s operations. Among the complaints, some traders expressed frustration that smaller transactions were not afforded the same priority as larger orders.

Papertrade defended the approach, explaining that indiscriminate transaction prioritization would have opened the door to thousands of minuscule orders overwhelming the system and exacerbating processing delays. Second, Papertrade acknowledged attempts by traders to manipulate bitcoin and ethereum prices.

According to the project’s statement on X, certain participants sought to exploit pricing data sourced from the perps DEX Hyperliquid, which Papertrade relies on to calculate the value of trading positions. This pricing mechanism is known as the best bid and offer (BBO).

In practical terms, it reflects the highest price a buyer is prepared to pay for an asset and the lowest price a seller is willing to accept. Papertrade maintains that some traders attempted to distort these quotations to extract profits from its exchange.

After the Frenzy, Papertrade Faces a Test of Staying Power