LP Solvency and FIFO Payout Queue Accounting

Papertrade can be temporarily insolvent by design, using separate accounting buckets and a FIFO payout queue.

Official Papertrade documentation · Updated November 5, 2026 · Canonical domain: papertrade.finance

The three accounting buckets

The documentation describes treasury as the tracked LP balance, sideBucket as proceeds parked while the queue is active and the payout queue as FIFO debt owed on unpaid winning profit.

What enters the queue

Only the unpaid profit portion of a winning close is queued when reserves cannot cover it. User margin is returned to available balance separately.

Losses and liquidations

When the queue is empty, eligible LP-retained loss proceeds can credit treasury. While the queue is active, proceeds can be parked in sideBucket and used for later queue harvest.

Harvest

A permissionless harvest process pays entries from the front of the queue as backing becomes available, debiting parked backing before residual value returns to normal LP accounting.

The main solvency components

Protocol-side solvency is best read as the relationship among available LP liquidity, directional trader exposure, realised settlement flows and queued obligations. A positive LP balance alone does not describe all future liabilities because open positions can still move before they close.

Why FIFO ordering matters

The payout queue preserves order when winning profit is deferred. Earlier eligible claims sit ahead of later claims, which makes queue position part of the settlement state. Replenished liquidity can then move through the queue in order rather than selecting payouts arbitrarily.