Holy shit, is someone exploiting a suspected oracle manipulation vulnerability to drain Paper’s LP?
Papertrade only officially launched last night, touting 1,000x leverage, zero slippage, and no funding fees. But now a trader has found a vulnerability that could be used to specifically exploit its LPs.
First, open a huge ETH short on Papertrade.
Then sell a large amount of ETH on Hyperliquid, pushing the order book’s mid-price down by about 0.1%.
Papertrade reads HL’s mid-price directly, so the short instantly becomes profitable—and the platform’s LPs cover the profit when it’s closed.
Next, flip the position and go long while buying back ETH on HL to push the price back up, then try to profit a second time.
Papertrade only officially launched last night, touting 1,000x leverage, zero slippage, and no funding fees. But now a trader has found a vulnerability that could be used to specifically exploit its LPs.
First, open a huge ETH short on Papertrade.
Then sell a large amount of ETH on Hyperliquid, pushing the order book’s mid-price down by about 0.1%.
Papertrade reads HL’s mid-price directly, so the short instantly becomes profitable—and the platform’s LPs cover the profit when it’s closed.
Next, flip the position and go long while buying back ETH on HL to push the price back up, then try to profit a second time.