Trader Makes $1.28 Million on New 1,000x Exchange Papertrade by Moving ETH Prices on Hyperliquid
Single wallet profits $1.28 million in hours on Papertrade's first day
A single wallet made about $1.28 million on Papertrade, a perpetuals exchange (a platform that lets traders bet on asset prices with high leverage), within hours of its Saturday launch. The wallet moved ETH (Ethereum) prices on Hyperliquid, the blockchain that Papertrade uses as its price reference, while holding large positions on Papertrade.
Papertrade went live at 10 a.m. ET on Saturday, October 10, on HyperEVM, the smart contract layer of Hyperliquid's blockchain. The exchange offers up to 1,000x leverage on trades, 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. Losing traders earn the protocol's native PAPER token.
The activity was first flagged by users on X (formerly Twitter) on Saturday evening. Papertrade confirmed the manipulation attempts on Sunday and said it has started tightening its position limits.
How the wallet traded
- The wallet, identified as 0x2025...840e, opened large positions on Papertrade, then bought or sold thousands of ETH on Hyperliquid to move the reference price before closing.
- 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 (0.12%). At 6:03 p.m., it sold about 5,210 ETH and the price fell about $3.50.
- The wallet traded about $231 million worth of ETH on Hyperliquid on Saturday evening and paid roughly $52,000 in trading fees.
- Papertrade's own portfolio page shows the wallet made $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.
Partial reversal through liquidation
At 7:13 p.m. ET, the wallet opened 30 ETH short positions (bets that ETH will fall) at 660x leverage with a combined notional value of $297 million. It then sold about 6,590 ETH on Hyperliquid over the next three minutes, pushing the price down to $2,504.40.
Unlike the earlier trades, which lasted only minutes, these shorts stayed open for more than three hours. They were liquidated at 10:31 p.m. ET at $2,509.95, resulting in a loss of $450,000. That liquidation minted about 17.6 million PAPER tokens to the wallet, according to Papertrade's interface. The $450,000 loss reduced the wallet's prior gains but not entirely.
Papertrade says loose launch caps enabled the trades
In a Sunday morning post on X, Papertrade said the overnight manipulation attempts on BTC and ETH were possible because it set open interest caps loosely to handle launch demand. The protocol said it has begun tightening those caps both onchain and at the relayer level. It also noted that its launch queue made the timing of opens and closes unpredictable.
Papertrade stated that the liquidity pool holds $5 million and that it has paid $25 million to PAPER stakers. A chart in its 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 the names Jez and Blurr.
At 1,000x leverage, a 0.1% price move equals the full margin on a position. This extreme sensitivity is why small price changes on Hyperliquid had outsized effects on Papertrade positions.
Unverified claims about profit return
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. According to Papertrade's own records, the 0x2025 wallet's withdrawals from Papertrade still exceed its deposits by about $1.28 million.
Prior losses at Hyperliquid from single-trader positions
Hyperliquid's own liquidity vault has posted losses from large single-trader positions in the past. 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.
Background on the wallet
Over its lifetime, the 0x2025 wallet has logged about $14.2 billion in volume and $13.1 million in profit on Hyperliquid. It began trading on Hyperliquid in February 2025 with about $2 million in deposits. 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.
Related context
X user Boblob flagged the activity on Saturday evening, noting that two wallets were moving ETH on Hyperliquid with trades of about $20 million each. X user butler published the wallet address and a breakdown of its trades later that night, speculating that Papertrade could have blocked the wallet from closing its shorts to prevent additional trades. No evidence from the sources confirms that Papertrade blocked the wallet.
The Block reached out to both Papertrade and Hyperliquid for comment.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.