Lost $979,000, got 252 million PAPER
On October 16, one address racked up $10.1 billion in trading volume on Papertrade’s first day. It lost $979,000 on the futures side, but received 252 million PAPER in return. Then it stopped trading and staked all the tokens, earning 1.73 million USDC in rewards and ending up $762,000 ahead on paper.
The strategy’s returns came entirely from the staking yield; the trading itself lost money. Locking 252 million tokens in the staking contract takes a chunk out of the circulating supply, providing short-term price support. PAPER’s valuation depends on how quickly the reward pool is depleted. Once daily rewards fall, unlocked tokens will start flooding the market. Market-making depth won’t be able to absorb 252 million tokens hitting the market, and the price could drop more than 30% before finding support. By comparison, tokens whose prices are supported by buybacks funded by real trading fees have a cushion, along with broader risk appetite. Purely incentive-driven tokens lack that buffer, so the medium-term outlook is bearish.
Keep an eye on the reward pool balance and the staking unlock schedule—these two metrics move before the price chart does. For those holding PAPER: how low would the annualized yield have to fall before you’d unlock and dump?
$HYPE $BTC $PAPER
On October 16, one address racked up $10.1 billion in trading volume on Papertrade’s first day. It lost $979,000 on the futures side, but received 252 million PAPER in return. Then it stopped trading and staked all the tokens, earning 1.73 million USDC in rewards and ending up $762,000 ahead on paper.
The strategy’s returns came entirely from the staking yield; the trading itself lost money. Locking 252 million tokens in the staking contract takes a chunk out of the circulating supply, providing short-term price support. PAPER’s valuation depends on how quickly the reward pool is depleted. Once daily rewards fall, unlocked tokens will start flooding the market. Market-making depth won’t be able to absorb 252 million tokens hitting the market, and the price could drop more than 30% before finding support. By comparison, tokens whose prices are supported by buybacks funded by real trading fees have a cushion, along with broader risk appetite. Purely incentive-driven tokens lack that buffer, so the medium-term outlook is bearish.
Keep an eye on the reward pool balance and the staking unlock schedule—these two metrics move before the price chart does. For those holding PAPER: how low would the annualized yield have to fall before you’d unlock and dump?
$HYPE $BTC $PAPER