The bottleneck of Papertrade:
There’s no protection against price manipulation or price deviations
CEXs use a Fair Price / Mark Price calculated from external exchange index prices and TWAP
This is done specifically so a single large player can't wick the order book for a second and liquidate users
If the order book on Hyperliquid thins out at any point, an attacker could move the Bid/Ask on HL with a large order, forcing the BBO precompile to return a distorted price
The attacker could artificially widen the spread on HL, open a 1000× leverage position on Papertrade at the distorted mid price, and then let the order book normalize to close the position for a massive profit at the expense of the
@papertrade_xyz LP pool
Worst case scenario, the team can freeze the market, locking in the last BBO price to settle existing positions