Papertrade launch-day price manipulation (HyperEVM) hack — October 2026

Papertrade, a perpetual futures exchange offering up to 1,000x leverage on HyperEVM, the smart-contract layer of Hyperliquid, lost about $1.28 million to one trader within hours of opening at 14:00 UTC on 10 October 2026. Papertrade prices every trade at the midpoint of Hyperliquid's best bid and offer. Winning trades are paid from a shared USDC pool funded by traders' losses. According to The Block, one wallet repeatedly opened large Papertrade positions and then moved the ETH price on Hyperliquid in its favour. Between 22:01 and 22:02 UTC it bought about 6,060 ETH on Hyperliquid, lifting the price about $3, or 0.12%. At 22:03 UTC it sold about 5,210 ETH, and at 22:06 UTC it withdrew $1.54 million from Papertrade.

At 23:13 UTC 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 three minutes, pushing the price to $2,504.40. The shorts stayed open and were liquidated at $2,509.95 at 02:31 UTC on 11 October, costing about $450,000 of the earlier gains. Over the evening the wallet traded $3.18 billion of volume on Papertrade, deposited $1.2 million and withdrew about $2.48 million, a net $1.28 million, which is the figure recorded here. Crypto Briefing put its peak gain at $1.73 million. Papertrade is not on a chain this registry lists separately, so the chain is recorded as other.

Papertrade said on 11 October that the manipulation was possible only because it had set open-interest caps very loosely for launch-day demand, and that it had begun tightening them on-chain and at its relayer. It said the trader had since given almost all of the profit back to the pool by trading again through new accounts, and that other users had agreed to undo manipulated trades in exchange for the PAPER tokens they had earned. The Block could not verify either claim. Papertrade's own records still showed the wallet's withdrawals exceeding its deposits by about $1.28 million, so nothing is recorded as recovered. Papertrade put its pool at $5 million on 11 October.