BlockBeats reported on Oct. 19 that crypto trader Ansem said Papertrade could become an innovative project with long-term growth potential.
Ansem wrote that high-leverage perpetual contracts have long been one of the most profitable products in crypto, and demand for speculative trading is likely to persist. Papertrade, he said, allows users to open and close synthetic 1000x leveraged positions without causing actual market impact.
How the model routes losses
According to Ansem, Papertrade uses trader losses to support an on-chain liquidity pool, or LP. Once the LP passes a certain size cap, losses above that threshold are distributed to PAPER stakers. He said more than $50 million was allocated to PAPER stakers in the platform’s first week after launch.
He contrasted that approach with traditional perpetual decentralized exchanges, which mainly generate revenue through trading fees. Papertrade, by comparison, attempts to convert trader losses directly into a revenue source. Because winning in high-leverage trading is difficult, Ansem said trader losses could theoretically cover the gains of profitable traders over the long run.
Ansem’s view on expansion potential
Ansem added that after the LP reaches a certain upper limit, the model could still keep a distinct advantage even if the ratio of profitable traders to losing traders gradually approaches 50:50. In his view, that is because traders can share in platform revenue by staking the platform token instead of only paying fees to the platform.
He also said the model could eventually expand beyond perpetual contracts into other speculative games, including online entertainment. If Hyperliquid is seen as infrastructure for finance, he wrote, Papertrade could have the potential to become infrastructure for high-leverage speculation and gaming on the internet.
At the same time, Ansem said the market still needs to determine whether the model can continue attracting users, maintain liquidity and deliver long-term development.