Zero Funding Rate? The New Contract Design of HyperEVM That Foreigners Are Talking About
Jez, a prominent crypto trader, announced his new protocol PaperTrade on HyperEVM, sparking significant discussion. PaperTrade is a perpetual DEX with zero fees, no slippage, and no funding rates.
The protocol's mechanism draws from the historical "bucket shop" model, where trades are settled directly against a public LP pool based on Hyperliquid's order book prices, without ever interacting with Hyperliquid's matching system. It combines perpetual contracts with P2P lending and DeFi Ponzi elements.
User losses go into the LP pool, while a portion of user profits is taken as protocol fees. Crucially, the LP pool is seeded solely by user losses, not external deposits. If a user's profit exceeds the pool's balance, the profit enters an on-chain queue, to be paid out sequentially by subsequent user losses. The protocol mints its PAPER token based on user losses, with a minting rate that decays as the LP pool grows. Staking PAPER yields dividends from protocol fees and excess pool funds above a $5M cap.
A key uncertainty is its deployment on HyperEVM. Since PaperTrade essentially uses Hyperliquid as a free oracle, its logic could be replicated on any high-performance chain with an external price feed, potentially offering better performance or incentives. The launch also serves as a stress test for HyperEVM's network capabilities.
marsbit05/14 03:15
