When Trading Outcomes Create New PAPER Supply

Why PAPER exists, how traders mint it and why the emission rate is highest early in the LP lifecycle.

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

A fair launch by construction

The project documentation describes PAPER as starting at zero supply with no pre-mint, team allocation, VC allocation, airdrop or vesting schedule.

Why PAPER exists

PAPER is the protocol LP-revenue claim token. Staking PAPER gives the holder a pro-rata claim on the documented USDC staking revenue streams.

How PAPER is minted

Eligible losing closes and liquidations mint PAPER. Larger eligible losses produce more PAPER at the mint rate active when the loss settles.

When the rate is highest

While tracked LP is below the $2M threshold, including underwater states, the documented flat rate is 100 PAPER per $1 of eligible loss basis.

Above the flat threshold, the mint rate decays as the tail high-water mark grows.

Why emissions are loss-backed

PAPER links token creation to protocol trading economics instead of a pre-minted allocation schedule. Eligible realised loss basis is the input, and the active mint rate determines how much PAPER is created. This makes early supply growth dependent on actual protocol activity and the state of the emission curve.

Supply growth and dilution

Minting creates new PAPER supply. Existing holders are not automatically protected from dilution; ownership share depends on both total supply and how much PAPER is staked. Staking revenue is also variable, so supply growth should be analyzed separately from USDC distributions rather than converted into a promised yield.