Losing money and still being able to mine coins, with daily fees exceeding Hyperliquid, is PAPER the next HYPE? Another project in the Hyperliquid ecosystem, you don't have to wait for airdrops, you can get tokens by losing money in transactions. You heard me right, you can get rewards if your position is liquidated This project is called Papertrade and runs on HyperEVM, supporting up to 1000 times leverage Its cost data quickly exceeded that of Hyperliquid Papertrade's expenses in the past 24 hours were about 7.33 million US dollars, while Hyperliquid's were about 3.47 million US dollars, with the former being about 2.1 times higher than the latter Pulling the window to the past 7 days, Papertrade is about 49.57 million US dollars, Hyperliquid is about 14.87 million US dollars, a difference of about 3.3 times With such numbers, no wonder some people are starting to ask: Will PAPER become the next HYPE? But before we discuss, we need to clarify how these two companies actually make money Papertrade is not another Hyperliquid order book According to the official documentation, users trade synthetic positions between themselves and the protocol liquidity pool. Opening and closing positions refer to the middle price of the best buying and selling quote on Hyperliquid, but will not result in the establishment of a corresponding perpetual position on Hyperliquid User profitability, liquidity pool payment; Users are losing money and funds are entering the pool. So, it does not charge traditional nominal principal opening fees, nor does it have corresponding funding fees for real perpetual positions But this does not mean that there are no costs involved in the transaction. When a user closes out their profit, the agreement will first reduce the profit. The profit corresponding to small price fluctuations may have a larger reduction ratio; Afterwards, a 2% fee will be charged on the remaining profits It is not completely abandoning fees, but putting a considerable portion of transaction costs into profit settlement This also explains why the cost figures of the two companies cannot be directly understood as the same type of business These data statistics from Papertrade not only include the costs of closing and clearing positions, but also the overflow profits distributed to PAPER stakers after the liquidity pool exceeds the $5 million threshold, as well as the trading profits and losses remaining in the pool, which are not directly included in the calculation That is to say, this is not simply counting all user losses as income, but it is also not just ordinary transaction fees It is true that the cost ranking exceeds Hyperliquid, but it has not yet proven that it has a more sustainable trading business than Hyperliquid The more controversial aspect of Papertrade lies in how PAPER was generated According to official rules, PAPER starts from zero supply, without pre mining, team or VC token allocation. Users will only mint PAPER if they achieve eligible trading losses or are liquidated. By pledging PAPER, one can share a portion of the fees and eligible liquidity pool overflow profits This is equivalent to exchanging a transaction loss that has already occurred for the right to distribute future agreement income It has indeed changed the motivation for user engagement Ordinary traders hope to make correct judgments and make profitable trades; But under this mechanism, participants may also consider whether the PAPER obtained from this transaction, even if it incurs losses, can bring enough income in the future? According to the official liquidation instructions, if a 1000 fold position encounters an unfavorable price change of approximately 0.052%, it may trigger a full quarantine margin liquidation. This magnitude is much smaller than many people's perception of a market trend On the other hand, the winner may not necessarily take all the profits immediately When the liquidity pool is insufficient to pay, unpaid profits will enter the first in, first out queue, waiting for subsequent funds to be replenished. According to the document, the return of principal opened with available USDC balance is separated from the profit queue for this portion No slippage in transactions and immediate realization of profits are two different things So, is the outbreak of Papertrade beneficial or competitive for HYPE? I think two things could happen at the same time It proves that Hyperliquid is not just a trading website: developers can leverage HyperEVM and HyperCore states to create another trading product that attracts users and funds These on chain operations will consume HYPE as gas, and the related gas costs will be burned according to the HyperEVM mechanism, which is a confirmed value transmission path But Papertrade's own expenses will not automatically become HYPE repurchases just because it runs on HyperEVM. It quotes from Hyperliquid, but it does not mean that the transaction order is handed over to Hyperliquid for matching. If it attracts new users who would not have otherwise entered this ecosystem, this is business expansion; If users only move the funds and attention that were originally invested in HyperCore trading, there may also be a diversion of trading revenue There is no data on new funding sources, user overlap, and actual gas consumption, so one cannot be directly used as a conclusion at this time The same distinction should also be made for PAPER It has demonstrated strong short-term appeal and designed an actual USDC profit distribution mechanism, but will users continue to trade as the early coin advantage gradually declines? Can liquidity pools and payment queues bear the concentrated profits of traders? Can the income allocated to the pledger be sustained? Anyway, the HyperEVM ecosystem has more excellent projects, allowing more users to flock into the ecosystem, which is a good thing for the ecosystem. Hyperliquid also has more opportunities to go viral, which represents more possibilities. HYPE Hyperliquid PAPER