Paperps docs
Synthetic perpetuals settled fully on-chain against a protocol-owned pool. Mechanics follow the reference model one-for-one.
Overview
Every trade is a synthetic long or short against the protocol LP, priced at the oracle mid. There is no order book, no counterparty matching, no funding rate and no spread. The LP starts empty and is funded only by traders' realised losses; it pays traders' realised wins.
Opening a position
Pick a side, commit USDC margin and choose leverage from 1× to 1000×. The position's notional is margin × leverage and its entry is the oracle mid when the relayer executes your signed intent. Positions are discrete: you can hold many at once and each one closes on its own.
Enabling trading registers a session key with one wallet signature. It signs open and close intents silently for up to 30 days, so trading needs no wallet pop-ups. It can never withdraw, stake or claim.
Busts
A position busts when price moves against it by 1/leverage − 0.05% (the 5 bp maintenance buffer). At 1000× that is about 0.05%; at 100× about 0.95%; at 10× about 9.95%. On a bust the whole margin goes to the LP and mints EMBER.
Winning closes
Wins are paid in three steps:
- A 0.2 bp dead band is removed from the move; a smaller win pays nothing.
- An impact haircut scales the gain:
scale = (1 − baseRate) / (1 + 1/(move·rateMult) + refNotional/(1e6·move·posMult)). Small moves on big size are cut hardest; scale never exceeds 90%. - A 2% win fee comes off the scaled gain, split between stakers and the developer.
Losing closes
Losses are taken at face value, floored at your margin, with nothing extra charged. A 2% fee is carved from the LP's gain (waived while the payout queue is active), and every $1 lost mints EMBER.
Solvency and the payout queue
If the LP's free cash can't cover a win, the unpaid part joins a first-in-first-out queue and is paid from later losses through a permissionless harvest(). Queued balances are claims, not cash: they can be used as margin, and they settle strictly in order.
EMBER
EMBER is minted on realised losses and busts: a flat 100 EMBER per $1 lost while the tracked LP is under $2M. Above that, the rate follows a one-way high-water-mark ratchet: it only ever goes down, so early losses earn the most.
Staking
Staked EMBER earns USDC: 1% of settled trader PnL while the queue is empty, plus everything in the LP above the $5M cap. No lock-up and no cooldown.
Fees at a glance
| Opening | None |
| Funding / spread | None |
| Winning close | Impact haircut, then 2% of the scaled gain |
| Losing close | Nothing extra (2% carved from LP gain) |
| Staker share | 1% of settled PnL + LP overflow above $5M |
Risks
- Leverage. At 1000× a 0.05% move ends the position.
- Oracle. Prices come from an external feed. A manipulated or stale mid moves every position; staleness and deviation guards reduce but don't remove this.
- Queue. If wins outrun losses, payouts wait in the queue until new losses refill the LP.
- Admin. A 2-of-3 multisig can pause markets and tune parameters; upgrades go through a 7-day timelock.
- Code. The contracts are unaudited. Testnet only.