$1.15 trillion in cumulative notional volume, $67.55 million in TVL, and 46.71 million USDC in cumulative staking rewards.
Less than a week after launching PaperTrade, it has already delivered these results. "Total staking rewards" represents the earnings distributed to PAPER stakers.
Discussions surrounding PAPER have thus shifted. Initially, traders were concerned about how many tokens they could acquire for a given loss; now, the more pressing question is how much income the received PAPER will generate and what it should actually be worth.
Revenue continues to grow
How strong is PaperTrade at the start? Take a look at this comparison.
According to DefiLlama data, PaperTrade generated $23.97 million in holder revenue on October 10, and accumulated $33.94 million from October 10 to 13. In comparison, Hyperliquid reached a single-day revenue peak of $8.81 million and a four-day cumulative peak of just $22.3 million—less than PaperTrade’s daily revenue.
Daily records are easily inflated by initial hype; subsequent performance is more convincing. Several days after PaperTrade launched, daily staking rewards gradually increased.
The number of protocol users is also steadily increasing, with the total number of unique deposit addresses for PaperTrade reaching approximately 14,900 and cumulative deposits totaling around $241 million USDC. Combined with the ongoing growth in daily rewards, these metrics demonstrate that PaperTrade has cultivated a vibrant community of active participants.
Yield distribution
The appeal of PaperTrade lies in how it connects the trading experience, token issuance, and profit distribution.
Traders trade against the liquidity pool without waiting for another user to take the other side of the order; there are no funding rates on positions, and no fees are charged for opening positions or on losses. Leverage of up to 1000x is supported. After a trading loss, eligible losses generate PAPER. By holding and staking PAPER, users can participate in the protocol’s USDC yield distribution.
For high-frequency traders, this combination offers a different cost structure; for early participants willing to take on risk, losses come with the opportunity to gain rights to future earnings. Traders and platform revenue participants can be the same group.
Ansem sees this as the key point. He believes the revenue potential from traders' losses far exceeds the small fees collected per trade.
The issuance mechanism of PAPER is also altering participants' costs. Initially, up to 100 PAPER tokens could be minted for every dollar of eligible loss; once the protocol's tracked LP exceeds the $2 million threshold, the minting rate begins to decline. The additional supply of PAPER has significantly diminished after the initial concentrated release on day one.
Meanwhile, PAPER’s earnings come from LP revenue sharing, and when LP exceeds $5 million, the excess funds are distributed to PAPER stakers. Continuous income generation and a slowing rate of early issuance provide further incentive for existing PAPER holders to continue staking.
Currently, the total supply of PAPER is approximately 8.16 billion, with about 8.1 billion tokens staked, resulting in a staking ratio of 99.23%. With nearly all tokens staked, PAPER’s value is directly tied to its revenue performance.
Pricing
As of October 16, PaperTrade's historical daily average staking income was approximately $5.06 million, equivalent to an annualized income of about $1.85 billion.
But even after significantly discounting this number, PAPER still has a valuation worth discussing.
Under conditions approaching full token staking, the value of each PAPER can be estimated using a simple model:
Paper Reference Price = Holder Daily Income × 365 × Holder Income Multiplier (Annualized) ÷ Token Supply.
Here, the income flowing to token holders is used; the historically distributed 46.71 million USDC is no longer added again as an additional asset.
The current ratios of circulating market capitalization to holder profitability for PUMP, HYPE, and LIT are 6.53x, 21.46x, and 27.33x, respectively. Here, we use the lower value of 6.53x.
On the token supply side, 8.16 billion PAPER tokens have already been minted, and future issuances will dilute the income allocated to each token. We consider two future supply scenarios: 14 billion and 18 billion tokens.
Paper Strategy
The PAPER token is not yet available for trading. PaperStrategy is the 'PAPER' treasury on HyperEVM and is currently one of the few ways to gain exposure to PAPER outside of OTC.
To generate yields around PAPER, PaperStrategy has established an accumulation mechanism. A 10% tax is applied to both buys and sells of the PSTR token; 90% of the tax revenue goes to the treasury, and 10% goes to the team. The treasury uses trading strategies to accumulate PAPER, stakes it, and allocates 90% of the staking rewards toward repurchasing and burning PSTR, while the remaining 10% goes to the team.
Currently, PaperStrategy has staked approximately 154 million PAPER. Over the same period, the market capitalization of PSTR was approximately $8.5 million. After deducting approximately $600,000 in account and treasury balances not yet converted to PAPER, and accounting for a 10% tax on both buys and sells, the implied price per PAPER is roughly $0.064. This provides a window into the market pricing of PAPER.
PaperTrade has made a strong enough start, and the value of PAPER has begun to be supported by revenue. Next, what matters is whether the sustainability of this revenue can provide a solid valuation foundation for PAPER.