📢 Flash
Non-transferable PAPER sparks negative sentiment: “Loss-making mining” exit route blocked, pre-market contracts delisted by multiple exchanges, platform data sharply declines
On the morning of October 20, Papertrade—a high-leverage synthetic perpetual protocol built on HyperEVM—announced that the PAPER token is currently and will remain, for the foreseeable future, non-transferable outside of smart contracts. Concurrently, the protocol optimized its fee structure and overhauled its token minting curve. According to the official statement, permitting external perpetual markets to short PAPER would significantly lower the cost of manipulation attacks targeting the protocol’s liquidity pool. To mitigate systemic risk and safeguard operational security, the team has decided to postpone enabling token transfers. Meanwhile, the minting mechanism has been revised: newly minted supply is now allocated proportionally based on the protocol’s cumulative loss ratio, with continuous emissions gradually diluting early holders’ equity.
Markets reacted swiftly following the announcement: Paragon—the deployer of the HIP-3 market—immediately halted pre-launch perpetual trading for PAPER, executing forced liquidations and a unified settlement at a fixed price of $0.026296 per token; Aster likewise switched its PAPER pre-launch perpetual contracts to “close-only” mode and initiated delisting procedures.
Internal platform metrics came under immediate pressure: BTC-denominated positions plunged from ~$390 million to $230 million—a 41% drop; ETH positions slid from ~$150 million to $66.3 million, a 55% decline; overall net outflows reached ~7%, and total value locked (TVL) fell from a peak near $100 million to approximately $58.3 million.
Market consensus holds that this policy shift has effectively severed the core exit channel for “loss-mining” users—most of whom participate primarily to capture airdrops rather than engage in genuine trading activity. With transferability suspended *and* a dynamic dilution-based minting mechanism now in place, staking rewards can no longer meaningfully offset prior losses, substantially extending the breakeven horizon.
“Brother Maji”—one of Papertrade’s largest PAPER holders—was among the first to comment: PAPER may remain locked for transfers indefinitely; for now, holders can only earn yield via fee-sharing. However, as new tokens continue to be emitted, the dividend weight per token will inevitably be diluted. He added that the issue isn’t insurmountable—but further clarity depends on official updates.
Some community members pointed out that the project’s earlier roadmap explicitly stated plans to “enable token transfers in the future.” The abrupt, unannounced reversal of that commitment—coupled with a fundamental rewrite of the minting logic—has severely eroded trust among early supporters. By simultaneously blocking exits *and* diluting existing holdings, PAPER has effectively devolved into a non-transferable rebate voucher. One user bluntly labeled it “soft-rug adjacent,” calling the episode a major failure of expectations management.
In response, Jez—Papertrade’s co-founder—emphasized long-term protocol health: the intrinsic value anchor for PAPER lies not in its tradability, but in whether the protocol can sustainably attract authentic trading activity. The team refuses to sacrifice product evolution in order to artificially prop up PAPER perpetual liquidity. This adjustment was made deliberately, based on real-world operational data from the first week post-launch—not as a knee-jerk reaction.
Markets reacted swiftly following the announcement: Paragon—the deployer of the HIP-3 market—immediately halted pre-launch perpetual trading for PAPER, executing forced liquidations and a unified settlement at a fixed price of $0.026296 per token; Aster likewise switched its PAPER pre-launch perpetual contracts to “close-only” mode and initiated delisting procedures.
Internal platform metrics came under immediate pressure: BTC-denominated positions plunged from ~$390 million to $230 million—a 41% drop; ETH positions slid from ~$150 million to $66.3 million, a 55% decline; overall net outflows reached ~7%, and total value locked (TVL) fell from a peak near $100 million to approximately $58.3 million.
Market consensus holds that this policy shift has effectively severed the core exit channel for “loss-mining” users—most of whom participate primarily to capture airdrops rather than engage in genuine trading activity. With transferability suspended *and* a dynamic dilution-based minting mechanism now in place, staking rewards can no longer meaningfully offset prior losses, substantially extending the breakeven horizon.
“Brother Maji”—one of Papertrade’s largest PAPER holders—was among the first to comment: PAPER may remain locked for transfers indefinitely; for now, holders can only earn yield via fee-sharing. However, as new tokens continue to be emitted, the dividend weight per token will inevitably be diluted. He added that the issue isn’t insurmountable—but further clarity depends on official updates.
Some community members pointed out that the project’s earlier roadmap explicitly stated plans to “enable token transfers in the future.” The abrupt, unannounced reversal of that commitment—coupled with a fundamental rewrite of the minting logic—has severely eroded trust among early supporters. By simultaneously blocking exits *and* diluting existing holdings, PAPER has effectively devolved into a non-transferable rebate voucher. One user bluntly labeled it “soft-rug adjacent,” calling the episode a major failure of expectations management.
In response, Jez—Papertrade’s co-founder—emphasized long-term protocol health: the intrinsic value anchor for PAPER lies not in its tradability, but in whether the protocol can sustainably attract authentic trading activity. The team refuses to sacrifice product evolution in order to artificially prop up PAPER perpetual liquidity. This adjustment was made deliberately, based on real-world operational data from the first week post-launch—not as a knee-jerk reaction.
