Papertrade Sees Bitcoin and Ether Open Interest Drop After PAPER Decision

Open interest in Papertrade’s Bitcoin (BTC) and Ether (ETH) markets fell sharply after the platform kept PAPER nontransferable, while two venues halted or restricted derivatives trading tied to the token.

Bitcoin open interest on the HyperEVM-based perpetuals platform declined from about $390 million to $230 million. Ether open interest dropped from about $150 million to $66.3 million. Open interest measures the value of contracts still open; it does not measure cash withdrawn from the platform.

Paragon halted its PAPER prelaunch perpetual market and settled open positions at $0.026296. That figure was a derivative settlement price, not a spot sale price for PAPER. Aster moved its PAPER contract to reduce-only trading, preventing traders from opening or enlarging positions, and was preparing to delist it.

Papertrade has no current plan to allow PAPER transfers outside its contracts. The platform’s concern is that external short positions in PAPER could lower the barrier to an attack on its liquidity pool. It also plans to revise trading fees and the token issuance formula, which would gradually dilute earlier holders’ share.

Papertrade issues PAPER based on trading losses. Holders can stake the token for fee distributions, but they cannot transfer it to a spot market to sell.