Papertrade.xyz, a newly launched perpetuals DEX built on Hyperliquid, saw a dramatic collapse in open interest, dropping about 93.7% from $11 billion to roughly $693 million within around 24 hours.

Users reported transaction prioritization issues, with smaller trades allegedly deprioritized in favor of larger orders; Papertrade defended the practice as necessary to prevent system overload.

Analysts noted the rapid decline in activity raises questions about Papertrade’s ability to sustain long-term user interest beyond the initial surge.

There were reports of attempted price manipulation targeting Bitcoin and Ethereum prices through the DEX’s pricing mechanism, which Papertrade said some traders sought to exploit for profit.

Total value locked fell significantly during the period, slipping from about $118 million to $70 million, and later around $67 million, signaling a substantial retreat in trading activity.