Jason Pagoulatos Criticizes Papertrade’s PAPER Transfer Plan

Jason Pagoulatos, Delphi Digital’s head of markets, criticized Papertrade’s decision to keep Papertrade (PAPER) inside platform contracts after about $140 million in pre-deposits, calling the shift “kind of bait and switching you.”

Papertrade said Oct. 19 it had no plans at that point to allow transfers outside its contracts. Its Oct. 1 launch plan had listed token transfers as a later phase. Users who deposited under the earlier terms now hold PAPER they cannot move off-platform.

Papertrade, a high-leverage trading venue on Hyperliquid’s HyperEVM network, went live Oct. 10. Traders earn PAPER when they lose money and can stake the token for a share of fees.

Papertrade’s stated concern is that a freely traded token could make price manipulation profitable. Its example said a $15 million attack aimed at moving Bitcoin (BTC) or Ether (ETH) prices would not be viable on its own, but adding a $10 million short position in PAPER would make the attack viable.

Pagoulatos agreed that allowing transfers would expose PAPER to attack, saying “anybody can whip up a perp market.” He said Papertrade’s team manually blocked positions tied to large Hyperliquid market orders that moved Ether prices on launch day.

Pagoulatos argued that limiting pool size or leverage would take away reasons traders use the venue. He also said Papertrade had disclosed the risk in advance and that responsibility was shared.

Papertrade had distributed about $57 million to PAPER stakers through Oct. 21. Daily distributions were approximately $1.3 million on Oct. 20, $88,000 on Oct. 21, and $1.07 million on Oct. 22. Pagoulatos said current activity reflected organic use by people who wanted the product, rather than users farming tokens to sell. He said he would not call token farming over, but that continued farming would be extremely difficult.