Barv (tinker era)

posting my thoughts here
perps enthusiast @variational_io | onchain @TinkerTwenty

[Barv (tinker era) @barv89x]

Why did @alexandr_wang stop posting since yesterday 4pm

[Barv (tinker era) @barv89x]

@TheNestintern @0xthade @dreaming good lord 62% 😅😂

[Barv (tinker era) @barv89x]

kinda getting hook pilled by this

Essentially you can now have pool that holds no liquidity and instead computes the price on every swap by calling out to something else

pricing can be determined by external sources as well

like Lighter or Hyperliquid 😏😏

so many fun ideas here

[Uniswap @Uniswap]

Uniswap v4 is now an aggregator

Aggregator Hooks wrap external liquidity sources and turn them into Uniswap pools

Live today on Ethereum, Base, and Robinhood Chain in the Uniswap Web App and API

[Barv (tinker era) @barv89x]

Why does this stuff keep happening on lighter

[Takopi🐙 @OctopusTakopi]

someone just push $ETH spot price to $3.59M on Lighter

account 0x2Ba553d9F990a3B66b03b2dC0D030dfC1c061036 bought 225 $ETH for 1.38M in 5min at an avg price of $6,125, while the perp sat at $2,404

two market makers took ~90% of it, $837k gone in 264 seconds

[Barv (tinker era) @barv89x]

Gacha pack opening but instead of Pokémon cards it’s just money

Who’s building this

[Barv (tinker era) @barv89x]

Max pain is the market doing whatever I’m currently directionally biased towards

That’s max pain

Terrible pain

[Barv (tinker era) @barv89x]

@lazyvillager1 When giver is on a run you just step back and watch

[Barv (tinker era) @barv89x]

@evfiend AI + existing user distribution. Why limit oneself to one thing when they can spend 2 hours to add a new viral feature on top?

This is not just in crypto but will be the future for all business's

just like how the ai labs are trying to compete with their existing customers

[Barv (tinker era) @barv89x]

Papertrade devs made roughly $4.7 million in fees over the past 9 days

broken down:

>papertrades takes a 2% fee when a trader closes a position
>fee applies to a profit and to a loss
>protocol also takes a 2% fee when a liquidation occurs >devs receives 50% of each fee, and the PAPER stakers receive the other 50%.

that equals out to the team receiving 1% of each realized profit or loss and 1% of each liquidated margin

totaling up from the last 9 days they have gotten
-$4.01 million from closing positions
-$0.66 million from liquidations

Compare that to stakers who have received approximately $56 million.

So devs made out with roughly about 8% of the total revenue

Feels okay to me considering most teams keep 90% of the revenue, or take 30% of the token supply.

if we this was a normal token situation, they would grant themselves 25% of the tokens and dump or take 30% of the revenue

As an early farmer, i honestly had no expectations of making money past the first few days so im not really upset at the changes over the past day

not the best look 'experimenters' to just change rules later on but still happy to have participated

gg on to the next

[papertrade.xyz @papertrade_xyz]

A note on transferability.

Papertrade is a complicated primitive, and managing it from a risk standpoint is a complicated problem. The PAPER token is far more integrated into the economics of the primitive than most tokens are in their respective protocols today, and, broadly, was designed to act as a counter insolvency incentive coupled with a rebate mechanism to losing traders. Market makers and exchanges are by far the two most profitable businesses in crypto, and our goal was to try and externalise as much of their margins back to users as possible. We are now just over a week into the life of papertrade and we are becoming increasingly confident that this is both possible, but also a likely outcome as agentic led software becomes the norm.

As it stands, the paper token traded as a perp becomes a leveraged bet on bankroll solvency - and being able to short bankroll solvency materially changes the payoff curve of a manipulation attack. The target number goes from the bankroll, to the bankroll + short side exposure on paper. We can, and do limit bankroll size specifically to control this payoff curve and ensure it never becomes existentially problematic, but external perp markets are not something we would have any control over if left to float of their own accord. For example, if our bankroll is $10m, an attack costing $15m manipulating the price of bitcoin or ether is not viable. You simply lose money. If however you were also able to put on $10m of PAPER short side exposure, suddenly an attack costing $15m is very viable indeed.

If we were to make the token transferable at this point, we are confident we would quickly enter a state too dangerous to allow any material exposure to be taken on papertrade, an end result that benefits no party beyond the wolves who have done the math on the short and are waiting in the wings with sharpened knives.

We would also like to thank the various perps teams who have reached out about pre-market listings for their understanding and patience regarding this issue, and especially to the paragon team who, despite jumping the gun on us, have behaved with the utmost integrity and transparency once a dialogue was opened.

Perps on PAPER will always act as a self-limiting exposure ceiling for a token with this type of utility, and we think it would be a shame to limit the growth of papertrade to the extent that allowing perps would necessitate. As such, at this juncture we do not have plans to allow off-contract token transferability.

Structurally, papertrade is limited by the quality of the data it receives from hyperliquid, but we strongly believe that hyperliquid has a very large part to play in the future of global exchanges, and expect their books to continue to thicken and strengthen over time.

A note on fees.

Papertrade launched with a deadband fee from entry of 0.2bps. This means you don't earn anything until the price has moved by 0.002% in your favour. Over the months before launch, we played around with many different curves and fee structures affecting exclusively positions closed very close to entry price in order to try and devise a structure that removed the edge against the bankroll low time frame scalp bots have, whilst also minimally impacting the traders around which and for whom the product was devised. We were never able to find anything we were absolutely happy with and so decided to stay with the 0.2bp deadband fee through launch. This has however meant we have had to be very restrictive when it came to certain parameters, such as OI caps.

Now, however, we have enough live data to fully understand exactly which strategies work, and to make the necessary changes to stop them. The changes we are making will have an on hours and off hours fee mode to account for the relative differences in liquidity the hyperliquid books see between these two time periods, and the ease with which low time frame moves are signalled. The changes we are making will only affect positions closed within 6bps of entry (0.06%) in on hours, and 10bps (0.1%) in off hours. Any trades closed above these threshold price shifts will see no change to their fees at all. On a look back to launch basis, these changes affect the profitability of bot strategies roughly 15x more than they do normal traders, for whom a very small proportion of overall winnings come from within this band.

These changes should serve to flatten much of the edge our microfee structure necessarily creates on low time frames, and will help with long term exchange sustainability. This should hopefully allow us to open up parameters such as OI caps a little more so those of you who wish to can put on the size you want to, when you want to.

It is possible these changes are still too lax, and that further revisions to this structure may be necessary going forwards. If so, we will notify users ahead of time.

A note on paper tokenomics.

In conjunction with the fee changes, we will also be implementing a change to the token issuance curve.

Going forward, every $1 lost mints a fixed share of PAPER's supply at that moment, roughly 0.1% of supply per $1M lost (the exact number depends on the mint rate at the time the contracts are upgraded). PAPER minting in and near insolvency will also change, switching from a flat 100 per $1 of loss, to a time weighted multiplier on the curve growing over time, effectively acting as the house running a discounted auction on its own future cash flows. This change also removes the risk of the paper-mint-straddle-attack, temporarily pushing the protocol insolvent by closing only the winning side of a large straddle position and then attempting to mint as much paper as possible.

In the immediate term these changes will only have a very subtle effect on PAPER minting, but in the long run will structurally change the outlook of the system beyond the first few weeks, serving to slowly dilute out older holders and leaving more recent users with an advantage. Reconstituting the PAPER system into something much closer to the exchange rakeback it was intended to be.

We have been very reticent to touch this particular aspect of the system for obvious reasons, but ultimately we believe that these changes provide all users with the optionality to take a smaller piece of a potentially much larger pie than the current dynamic might necessarily allow.

Other, miscellaneous notes.

These contract upgrades will include a few other contract changes, including the addition of builder codes so that builders can utilise papertrade in whatever capacity they choose to. This will be a whitelist only to begin with and we will have more for you later in the week on where/how this will be rolled out. A small change to contract permissions on the reward distributor and a change on how below bust closes are processed by the exchange are also included, largely to block gas griefing attacks.

These changes will be pushed to docs in full over the coming day, and we will further announce once the changes are queued into the timelock pending final security passes, scheduled to go live 24 hours after that point.

Final note.

We'd like to thank everyone that has tried out papertrade over the last 10 days. It has been a labour of love building this product and both of us have been taken aback at all of the positive feedback we have received. We'd also like to thank all those of you who have spent considerable time musing on the system we have built, and much of your advice has been taken onboard and will likely affect the colour of what papertrade becomes going forward. We know some of these changes will be unpopular with some, but we would not be making them if we did not feel them to be absolutely necessary.

- blurr, jez

[Barv (tinker era) @barv89x]

I've been trying to figure out a new UX approach to options

In my own experience it's harder for me to open a position due to decision fatigue and uncertainty of my own choices

For example for a perps trade, I can easily visualize and mentally confirm I am going to risk 10x which means i get 10x more gains and 10x more losses.

I know where I get liquidated and mentally understand the reasoning for my losses is due to price action against my own leverage.

I also understand my gains as they are coming from the leverage as well. I'm long 10x so when the price goes up 10% I got 100% gains.

The decision I have to make when i want to be bullish is how much do I risk (margin) and how much do i leverage.

But when I try to make that trade for options, I have to make so many more decision.

When I create an options trade, I have to decide the
Strike price - I have to pick a strike price that fits how bullish i am and how much i want to risk. In my mind if I pick the wrong strike price, I might lose this trade.

If i pick ETH 3k and it goes to 2.9k i might not be profitable even though i am bullish from 2.4k at time of the trade! That definetly messes with my head.

Expiration price - I have to pick a time for my trade. This is a significant mental blocker for me. What if my bullishness takes longer to play out? What if i pick something too soon? But it also cost more to get more expiry.

Premium - I don't see this as margin that i am leveraging up. I see this as money I have to pay in order to trade. Its harder for me to size up because this feels like a payment or cost, not the position itself. The position is what I get after I pay the cost.

Then there are other things like IV, how volatile is this already and is the premium too expensive. Is this liquid? Is the spread acceptable or am do i have to cross 10% to close?

There are so many thing that i *feel* i must make the correct decision on to make the trade work

[Barv (tinker era) @barv89x]

Everyone mad at @papertrade_xyz did not read the docs and created their own fiction in their head about what this product really was

People got caught up in the ponzi portion of it and realized now that the math does not add up and you cannot actually be profitable getting liquidated

Late farmers are mad cause they thought they could at least exit their position and the yield would last forever

There’s nothing to be done. No one did anything wrong. Jez built something new that wasn’t another lame launchpad and we had fun playing the ponzi

The yields have been diluted, attention has peaked. Late farmers dead. The ponzi is over but now you get the business. There will always be a portion of gamblers looking to lose their money trading 1000x

[Barv (tinker era) @barv89x]

Been heavily invested in @papertrade_xyz over the past couple weeks.

Wanted to share my thoughts where I describe a scenario that may already be playing out as I post this.

Its been a while since a play this perfect has come around

enjoy :) https://t.co/5zhObr6Swu

[Barv (tinker era) @barv89x]

If I had to pick who would win the EVM I still think it would be robinhood over HYPE or Base tbh

[Barv (tinker era) @barv89x]

Lighter EVM is basically hyperEVM + CoreWriter but with actual throughput

>contracts read lighter's orderbook, positions, balances directly
>contracts place and cancel orders on core (async, same as CoreWriter)
>1s blocks with a 17M gas limit
>hyperEVM fast blocks are 1s with ~2-3M gas

its around ~6x the gas every second. could get a real trading app with real volume there. they just launched devnet but this is a real competition to hype

[Barv (tinker era) @barv89x]

Does hyperliquid have any plans for the EVM beyond CoreWriter?

Even with that value prop, there's no way it can compete with others chains when it comes to throughput

It makes sense that they are focusing mostly on HyperCore, but from reading their updates, it really does seem like they are just ignoring the evm

@papertrade_xyz has been an excellent revival of the chain, but you have to admit the experience on the hyperEVM version is dramatically worse than the copy paste version on Solana

[Barv (tinker era) @barv89x]

Papertrade got me inspired. 2 things ring true to me

1. Hyperliquid has opened the path to new interesting ideas through hypercore.
2. Ai lets us build our own products without having to rely on teams and funding.

Any idea is worth pursuing

[Barv (tinker era) @barv89x]

@simononchain @evfiend privy got token?

[Barv (tinker era) @barv89x]

Perps traders would perform significantly better if the max leverage was 3x

Perps would also be pretty much ignored and nowhere as popular if so

You can give traders more leverage or you can help them become profitable, you can't do both

[SalsaTekila @SalsaTekila]

Jordi is correct. Perps are incredibly difficult trading instruments with many risks unknown to non-professionals. I hate this perpification movement that glorifies and embellishes them. Retail will get slaughtered again.

[Barv (tinker era) @barv89x]

@5quab @SSnuffalupagus @papertrade_xyz concerning part is not gamblers leaving but getting vamped by better performing platforms

[Barv (tinker era) @barv89x]

Is it still worth it to farm @papertrade_xyz?

I have been skeptical but based on the last 24 hours, yes. Here's why.

>if you lose $1 today, you get about 14 PAPER
>so each PAPER costs you about $0.07
>but every dollar lost mints more PAPER
>so your share of the revenue shrinks over time
>today, revenue is about $6.8M a day
>if revenue stays at this level, you make back your loss in ~117 days
>if revenue drops by half, you never make it back

BUT this is only true if you lose for real (liquidated on a losing trade).

>if you hedge each loss with an opposite leg, your net cost is about 7× less.
>so if revenue stays the same, you make it back in ~2 weeks
>and if revenue drops by half, it takes ~3 weeks

So is it still worth it to farm?
Only if you think revenue stays around launch-week levels for the next few weeks

[Barv (tinker era) @barv89x]

@SSnuffalupagus they already have the user dist, and its Solana culture, i feel like its very expected 😅