OVERVIEW

//01_ WHAT PAPERHANDS IS

Paperhands is an exchange for synthetic perpetual positions on Bitcoin, Ether and nine large US stocks, settled in USDG on Robinhood Chain (chain id 4663). You post margin, choose a side and a leverage, and the contract pays you the difference when you close in profit, or keeps it when you close at a loss.

There is no order book and no other trader on the far side of your position. Every position is taken against one counterparty: the house. The house starts at zero. It holds nothing it did not take from losing trades or receive as a donation, and the rest of the design follows from that rule.

//02_ THE LOOP

1. 01
   A trader closes at a loss or is liquidated. The loss goes to the house, minus a 2% fee when nobody is queued.
2. 02
   The loser receives paper: house shares that cannot be transferred. While the house is small, the rate is 100 paper per $1 lost.
3. 03
   Half of every fee, and every dollar the house holds above $75,000 when no winner is waiting, is paid to paper holders.
4. 04
   A trader closes in profit. The house pays the gain, reduced by the impact haircut and a 2% fee, out of its cash.
5. 05
   If the house cannot pay the whole gain yet, the unpaid part waits in the queue line and is paid from the next losses, strictly in the order it was queued.

Folding early is not free, but it is not wasted either: a loser becomes a part owner of the house that took the loss.

//03_ ONE PRICE PER TRADE

A trade never fills at a price you could already see. You send a request; it fills at the RedStone price of the first 10 s grid point after your request. That price is signed by the oracle and checked on chain, and the moment it is taken from is fixed when you send the request: nobody, the keeper included, can choose another. The details are in the oracle and the fill rule.

//04_ THE NUMBERS

//MARKETS_

11 (2 crypto, 9 equities)

//MAX LEVERAGE_

100x crypto, 50x equities

//MIN MARGIN_

$1

//MAX POSITION_

$100,000 notional

//OPEN FEE_

none

//WIN FEE_

2% of the gain paid

//LOSS FEE_

2% of the loss

//FUNDING, SPREAD_

none

//FILL GRID_

10 s

//BUST BUFFER_

5 bps of price

//COLLATERAL_

USDG, 6 decimals

//05_ WHAT RUNS WHERE

• The exchange contract holds every balance, position, request, queue claim, paper balance and reward. It is not upgradeable. Its address is listed on the contract addresses page.
• The keeper is a service run by the protocol. It executes requests about 2 s after their fill time, liquidates positions past their bust price, opens and closes the equity sessions and runs the sweeps. Everything it does, except the equity session flag, can be done by any address.
• This website is an interface. It reads the chain, shows RedStone prices and prepares transactions for your wallet to sign. It never holds your funds.

//06_ WHERE TO READ NEXT

• Quick start: from an empty wallet to a first position.
• Wins and losses: how a close is settled, with every number worked out.
• The house and the queue line: what happens when the house cannot pay.
• Paper and the mint curve and rewards: what a loss gives you back.
• Risks and admin powers: read these before you deposit.