Paper Trade halts token trading after exploit risk identified

Paper Trade, a perpetual derivatives exchange offering up to 1000x leverage on Ethereum and Bitcoin with no slippage, suspended trading of its native token indefinitely. The decision followed the discovery of a structural vulnerability where users could exploit the platform by taking large positions on Paper Trade while simultaneously shorting the Paper token on Hyperliquid. This strategy allowed users to profit from manipulating the underlying asset prices on Hyperliquid, which serves as the oracle for Paper Trade, while hedging their exposure to the platform's token value. The suspension angered airdrop farmers who had invested significant capital to farm the token, which was initially non-tradable to ensure a fair launch. The incident highlights the risks of 'house' models in decentralized exchanges and the potential for complex cross-platform arbitrage attacks.