Trader Nets $1.28 Million Exploiting Papertrade via Hyperliquid ETH Price Manipulation

Papertrade is tightening onchain and relayer open interest caps after a trader extracted approximately $1.28 million in net profit by manipulating Ethereum prices. The attacker exploited Papertrade's pricing mechanism, which references the midpoint of Hyperliquid's best bid and offer for up to 1,000x leveraged positions. While native Hyperliquid systems were not breached, the trader executed roughly $231 million in ETH volume on Hyperliquid to shift quotes by 10 to 20 basis points, withdrawing $2.48 million against $1.2 million deposited despite a subsequent $450,000 liquidation loss.