PAPER's non-transferability sparks negative public opinion: 'loss-mining' exit path blocked, pre-market contracts delisted by multiple parties, platform data significantly declines
BlockBeats news, October 20: This morning, Papertrade, a high-leverage synthetic perpetual protocol based on HyperEVM, issued an announcement, clarifying that the PAPER token currently and in the short term will not be open for off-contract transfers, and simultaneously adjusting the fee structure and token minting curve. The official statement said that if external perpetual contracts could short PAPER, it would significantly lower the threshold for manipulation attacks against the protocol's liquidity pool. To avoid putting the protocol in a dangerous state, it decided not to open transfers for now; at the same time, the minting rules will be changed to a fixed minting of supply share based on loss ratio, gradually diluting early holders.
After the announcement, related pre-market markets reacted quickly. HIP-3 market deployer Paragon immediately suspended PAPER pre-market perpetual contract trading and completed forced settlement, with all open positions uniformly settled at approximately $0.026296; Aster also switched PAPER pre-market perpetuals to reduce-only mode and prepared to delist them.
At the same time, Papertrade platform data showed a clear decline: after the announcement, BTC open interest fell from about $390 million to $230 million, a drop of 41%; ETH open interest fell from about $150 million to $66.3 million, a drop of 55%. Platform funds also saw an outflow of about 7%, with TVL dropping to about $58.3 million, compared with a previous peak of about $100 million.
The market generally believes that this adjustment significantly weakens the cash-out exit path of "loss mining." Currently, most users prefer to gamble on airdrops rather than trade genuinely. With non-transferability combined with the token minting dilution mechanism, staking dividends can hardly cover prior losses, and the payback period has been further lengthened.
"Machi Big Brother," a Papertrade whale, was the first to speak out, saying that PAPER may remain non-transferable for a long time, and holders can currently only rely on fee distribution for returns, but as supply increases, the dividend ratio will also be diluted. "Machi Big Brother" also pointed out that there is still room to solve the related issues and is waiting for the official next move.
Some crypto community users pointed out that the official roadmap had mentioned opening transfers later, but today it suddenly changed its position and adjusted the minting curve, directly hitting early supporters' confidence. This is equivalent to locking the exit path while diluting early holders' returns, making PAPER closer to a non-circulating rebate voucher. Some users even directly called Papertrade a "soft rug" or a failure of expectation management.
PaperTrade co-founder jez, standing on the official position, said that the long-term value of the PAPER token depends on whether the protocol can continue to attract real traders, not on whether the token can trade freely. The team is unwilling to restrict business growth in order to support PAPER perpetual contracts. Today's adjustment is based on actual data from one week since launch and was not a hasty decision.
