The Papertrade haircut: what a win really pays
Papertrade has no trading fee, no spread and no funding. It earns on winning trades instead: every win gives part of itself back. How big that part is depends on one thing, how far the price moved.
No fee on the trade, a cut of the win
Papertrade charges nothing to open or close a position. There is no spread and no funding, and every trade fills at the mid price of the Hyperliquid order book. A losing trade pays its loss and nothing on top.
The exchange earns on the other side, on winning closes. Before a win reaches the trader, it goes through three steps:
- A deadband. The exit is measured as if the price were 0.002% worse, so a win smaller than that pays nothing.
- The haircut. What is left of the gain is multiplied by a scale below one. Papertrade calls it asymmetric impact.
- The win fee. 2% of the rest. Half of it goes to PAPER stakers, half to the developers.
The haircut in numbers
How much of a win survives depends on one thing: how far the price moved between the open and the close.
| Price move at close | BTC keeps | ETH keeps | $100 of BTC gain becomes |
|---|---|---|---|
| 0.01% | 21.0% | 16.0% | $20.95 |
| 0.02% | 38.7% | 31.5% | $38.68 |
| 0.05% | 60.7% | 54.0% | $60.71 |
| 0.1% | 72.4% | 67.6% | $72.43 |
| 0.25% | 81.3% | 78.8% | $81.29 |
| 0.5% | 84.6% | 83.3% | $84.63 |
| 1% | 86.4% | 85.7% | $86.38 |
After the deadband, the haircut and the 2% fee, at the parameters Papertrade publishes right now.
However far the price goes, a win never keeps more than 88.2%: the haircut never drops below its base rate of 10%, and the fee stays. The markets differ: at the same move ETH gives back more of a win than BTC, because its curve is steeper.
Why small moves give most of the win back
The scale a win is multiplied by is worked out from the move:
scale = (1 − baseRate) / (1 + 1 / (move × rateMultiplier) + referenceNotional / (10⁶ × move × positionMultiplier))
Both terms in the denominator grow as the move shrinks. At a move of a hundredth of a percent they dominate, and the scale falls toward zero. As the move grows, they fade, and the scale climbs toward 1 − baseRate.
Today the parameters are: baseRate 10%, rateMultiplier 15,000 and referenceNotional $100.0K; positionMultiplier is 814.598 for BTC and 483.979 for ETH.
The move matters. The size and the leverage do not
Papertrade adapted the idea from Rollbit, where the cut grew with the size of the position. Papertrade fixed that part to a reference notional per market, so the haircut is the same share of a win on a $100 close and on a $100,000 one.
Leverage is not in the formula either. It only decides how far the price can go before a losing position is liquidated.
What it means for a trade
- Scalping tiny moves pays most of the win back. After a 0.02% move a BTC win keeps 38.7% of its gain.
- A loss is paid in full. So a strategy that wins and loses on moves of the same size loses money on average, even when it is right half the time.
- A hedged pair always loses the haircut. A long and a short of the same size cancel each other's price risk, and what is left is the cut taken from the winning leg. That cut is the cost of the PAPER the losing leg mints; see what a hedged farm costs.
Short answers
Is the Papertrade haircut a fee?
Not in the usual sense. It is not charged on the size of a trade or on its price; it scales the realized gain, and only on winning closes. The 2% win fee comes on top of it, also only on wins.
Where does the haircut go?
It stays in the pool that pays the winners: the trader simply receives less. The 2% fee is split between PAPER stakers and the developers.
Does a bigger position pay a bigger haircut?
No. The size of the position is not in the formula, so the haircut takes the same share of a win at any size and any leverage.
Can the haircut change?
Yes. Its parameters are set per market by the contract owner. PAPER Scope reads them from the public Papertrade data, so the table above always shows the current ones.
More guides
Text last updated Oct 15, 2026. The figures are read live from the public Papertrade data. PAPER Scope is unofficial and none of this is financial advice.