An exchange offering 1,000x leverage, live for just 8 hours, had $1.28 million “carried off” with only $52,000.
Papertrade is built on Hyperliquid. It uses Hyperliquid’s mid-price directly, with a USDC liquidity pool acting as the counterparty.
The attacker first bought about 6,060 ETH on Hyperliquid spot, pushing the price up by around 0.12%, then amplified the gains using Papertrade’s 1,000x long positions. An hour later, they reversed course, sold heavily, opened a short position at around 660x leverage, and profited again.
In the end, they paid about $52,000 in fees on Hyperliquid and withdrew around $1.28 million from Papertrade—a roughly 1:25 ratio of cost to returns.
What’s really worth paying attention to here isn’t that someone made $1.28 million in a single trade, but the systemic risk this exposed:
External price feeds + a passive liquidity pool taking the other side + extreme leverage.
Together, these three conditions can create an opportunity to “move the price on platform A and harvest profits on platform B.”
The platform later said its position limits had been set too loosely and that it was tightening them.
But that raises another question:
If a platform promotes 1,000x leverage as a selling point, but then has to keep tightening position limits to control risk, is that 1,000x really trading capability—or just risk exposure?
High leverage itself isn’t the whole problem.
The real danger is this: can someone else influence the price you’re trading at?
Papertrade is built on Hyperliquid. It uses Hyperliquid’s mid-price directly, with a USDC liquidity pool acting as the counterparty.
The attacker first bought about 6,060 ETH on Hyperliquid spot, pushing the price up by around 0.12%, then amplified the gains using Papertrade’s 1,000x long positions. An hour later, they reversed course, sold heavily, opened a short position at around 660x leverage, and profited again.
In the end, they paid about $52,000 in fees on Hyperliquid and withdrew around $1.28 million from Papertrade—a roughly 1:25 ratio of cost to returns.
What’s really worth paying attention to here isn’t that someone made $1.28 million in a single trade, but the systemic risk this exposed:
External price feeds + a passive liquidity pool taking the other side + extreme leverage.
Together, these three conditions can create an opportunity to “move the price on platform A and harvest profits on platform B.”
The platform later said its position limits had been set too loosely and that it was tightening them.
But that raises another question:
If a platform promotes 1,000x leverage as a selling point, but then has to keep tightening position limits to control risk, is that 1,000x really trading capability—or just risk exposure?
High leverage itself isn’t the whole problem.
The real danger is this: can someone else influence the price you’re trading at?