Key facts
- Price = Hyperliquid order-book mid, read on-chain through precompiles.
- Your counterparty is always the protocol's LP, never another trader.
- No perpetual contract is opened on Hyperliquid, so there is no funding.
- The protocol takes its share from winning closes instead of a trading fee.
Synthetic swaps against a pool
When you open a position, the Papertrade contract on HyperEVM reads the best bid and best offer for that asset from Hyperliquid's order book and locks the midpoint as your entry price. When you close, it reads the mid again and settles your profit or loss directly against the liquidity pool (LP). Nothing is bought or sold on Hyperliquid itself.
Why there is no slippage or spread
On an order-book exchange, a market order buys at the ask and sells at the bid, and a large order eats into deeper, worse prices. On Papertrade you always get the mid, whatever your size, up to the per-position limit of $10M and the protocol's open-interest caps.
Why there is no funding
Funding payments exist on normal perpetual exchanges to keep the perp price close to the spot price, by making longs pay shorts or the other way round. Papertrade positions are priced from Hyperliquid's mid directly, so there is nothing to anchor and no funding to pay. Holding a position costs nothing over time.
How the protocol stays solvent
Trading at mid with no fees on entry would favour traders, so the protocol takes its share from winning closes:
- A tiny deadband of about 0.2 basis points: wins smaller than that pay nothing.
- An asymmetric impact haircut on the gain that is largest for small moves and shrinks as the move grows, with a slightly stricter curve during weekends and other quiet hours.
- A 2% fee on the gain that remains.
Losing closes pay nothing beyond the loss. Losses flow into the LP, which is how the pool grows from zero. The full schedule is in the Papertrade documentation.
Compared with an order-book perp exchange
| Papertrade | Typical order-book perp DEX | |
|---|---|---|
| Entry price | Mid price | Ask (long) or bid (short) |
| Large orders | No slippage up to limits | Slippage grows with size |
| Funding | None | Paid or received periodically |
| Trading fee | Charges only on winning closes | Maker/taker fee on every trade |
| Max leverage | 1000x on BTC and ETH | Usually 20x–100x |
| Counterparty | Protocol LP | Other traders |
The trade-offs
Because the LP pays every winner, a run of large wins can leave it short of USDC; the unpaid part of a win then waits in the payout queue. The design also depends on Hyperliquid's mid being fair: someone placing orders inside the spread can nudge the mid by a tick, which the protocol mitigates but cannot rule out. Read the risk disclosure before trading.
Try it with a small size first
Connect a wallet, deposit at least 10 USDC and start with low leverage.