Delphi Digital head of markets Jason Pagoulatos said on the Oct. 22 episode of Unchained that Papertrade is right about the danger of letting its PAPER token trade freely, but that changing course after users pre-deposited roughly $140 million is “a bad look.”
He said the move was “not exactly a rug” but that the team is “kind of bait and switching you” on the terms users signed up for. “You sell a bunch of people on a rule set beforehand, a bunch of money comes in, and now you change everything after the fact,” he added.
Papertrade, a high-leverage trading venue on Hyperliquid’s HyperEVM network that went live Oct. 10, said on Oct. 19 that “at this juncture we do not have plans to allow off-contract token transferability.” Its Oct. 1 launch plan had listed transfers as a later phase. Traders earn PAPER when they lose money and can stake it for a cut of fees.
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Papertrade’s reasoning
The team said a market for shorting PAPER would make price manipulation pay. In a hypothetical with a $10 million bankroll, it wrote, “an attack costing $15m manipulating the price of bitcoin or ether is not viable,” but adding a $10 million PAPER short would make that attack “very viable indeed.”
Pagoulatos agreed that an attack “will 100% happen if the token is made transferable because anybody can whip up a perp market” and that “we’ve already seen the first part of it happen the day of launch.” He said the team manually blocked positions tied to large Hyperliquid market orders that moved ether’s price that day.
Paragon listed a PAPER perp on Hyperliquid through HIP-3, the network’s system for third-party markets, on Oct. 18, then halted and settled it about a minute after Papertrade’s post.
Pagoulatos said that by capping pool size or leverage, “you kind of take away all the reasons in which somebody would use paper trade to begin with.” He also noted the team “literally put the risk in the doc ahead of time” and said “there is some blame to go around for everybody.”
Farmers and organic demand
Papertrade has distributed about $57 million to PAPER stakers through Oct. 21, according to DefiLlama. Daily payouts fell from about $1.3 million on Oct. 20 to roughly $88,000 on Oct. 21, then recovered to about $1.07 million on Oct. 22.
Pagoulatos said current activity shows “the organic usage of people who want this type of thing” rather than that of users who came “to potentially farm a token to then sell.”
He said he was “not gonna say it’s over,” but that “it’s going to be extremely tough.”
Related Listen: PaperTrade Attracted $140M, Then Changed the Rules. Was It a Bait and Switch?
The post Delphi’s Jason Pagoulatos Says Papertrade Is ‘Kind of Bait and Switching’ PAPER Holders appeared first on Unchained.