Analysis: Papertrade did not adopt Hyperliquid's official oracle pricing mechanism, and a trader manipulated it to profit $1.28 million.

BlockBeats news, October 11th, according to butler monitoring, Papertrade was online for only about 8 hours before an address exploited the pricing mechanism to profit approximately $1.28 million. A trader's historical cumulative profit on Hyperliquid exceeded $13 million, with a trading volume of $14 billion. Since Papertrade prices trades based on Hyperliquid's real-time ETH price, the attacker repeatedly established large long and short positions on Papertrade while simultaneously buying and selling ETH on Hyperliquid, briefly pushing the price up or down, and then closing positions for profit. Data shows that the trader conducted a total of 305 trades, of which 296 were profitable, with a win rate of about 97%, a typical holding time of only 98 seconds, and cumulative trading profits reaching as high as $1.73 million.

However, the attacker subsequently opened 30 short positions on Papertrade at a price of $2,507.35, with a notional value of approximately $297 million, and sold about 6,600 ETH on Hyperliquid, pushing the price down to $2,504.4, but this closing attempt was unsuccessful. Afterward, the ETH price rose to $2,509.95, causing all 30 short positions to be liquidated, with a loss of about $450,000, resulting in a final profit of approximately $1.28 million. The Papertrade team may have curbed the attack by preventing the attacker from closing positions, but this is only speculation and has not yet been confirmed.

Analysts pointed out that if the platform still directly uses Hyperliquid's BBO (Best Bid and Offer) as the pricing basis, the underlying manipulation risk still exists, and it is recommended to consider using Hyperliquid's official oracle price, which aggregates quotes from multiple trading platforms to reduce the risk brought by manipulation of a single order book.