PaperTrade Attracted $140M, Then Changed the Rules. Was It a Bait and Switch?

Traders tried to lose money fast to earn PAPER. Now the token may never be transferable, and one tracker shows staking revenue fell 93% in a day.

========================================================

Thank you to our sponsor!

Put your crypto to work with Nexo: earn daily interest or borrow funds against your assets on one platform trusted by more than 10 million clients.

Find out more at ⁠⁠⁠https://unchainedcrypto.com/go/nexo-podcast-sn⁠⁠⁠.

Geo-restrictions, eligibility and terms apply.

========================================================

Quick favor: We're deciding what Unchained does next; new shows, stream times, what's worth paying for.⁠⁠⁠⁠⁠⁠⁠⁠⁠ Our listener survey⁠⁠⁠⁠⁠⁠⁠⁠⁠ takes five minutes, it's anonymous, and I read the write-in answers myself. Everyone who takes it can enter a drawing for a free year of Unchained Premium or Bits + Bips Premium. Open through Sunday, October 18.

— Laura

========================================================

PaperTrade drew $140 million in pre-deposits and for one day flipped Nasdaq's daily notional volume by letting traders take up to 1,000x leverage against the house, with a PAPER token as the rebate for losing. Then the team announced it no longer plans to make PAPER transferable.

Jason Pagoulatos, Head of Markets at Delphi Research, joins Laura Shin to unpack how the protocol works and why the reversal landed so badly. He walks through the house pool that pays winners from losers' margin, the launch-day trader who pushed ETH around on Hyperliquid to move PaperTrade's price feed, and why a transferable PAPER would invite a larger attack.