Flat 100 PAPER per $1 of loss basis while tracked LP is under $2M, then 100 × (120M ÷ (120M + H))². H is the high-water mark of LP gain past $2M and only ratchets up, so the rate never recovers.
A losing close mints on 98% of the realised loss (the 2% fee comes off the LP side). A liquidation mints on 100% of the margin. The hard-bust buffer fires about 5 bps early.
Keeps (move − 0.2 bp) ÷ move × 0.9 ÷ (1 + 1 ÷ (move × 15000) + 100000 ÷ (10⁶ × move × posMult)) × 0.98; posMult 814.598 for BTC, 483.979 for ETH. A 1% move keeps 86.4%, a 0.1% move 72.7%.
Open long and short the same size, close the loser first (it mints), then the winner (it pays the haircut). Your cost is loss × (1 − keep), independent of leverage and size. Bigger moves are cheaper but the rate decays while you wait.
Trades fill against the protocol LP at Hyperliquid's BBO mid, with no fee on notional and no funding. The 2% fee applies to winning closes only.
PAPER is not transferable yet. It can be staked for USDC yield now; OTC deals settle later through a multisig with collateral.