Realized PnL, Winning Closes and Eligible Trading Losses

What happens when a Papertrade position closes: what the trader keeps, what the protocol takes and what losses can mint.

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

Winning closes

Raw profit comes from the price move against position notional. Before the gain is credited, the protocol can apply asymmetric impact that is strongest on very small winning moves and less severe on larger moves.

Losing closes

The trader realises the market loss without an additional user-side charge on top. LP-side fee accounting depends on solvency and queue state.

Eligible realised losses can mint PAPER according to the current emissions curve.

Why the settlement is asymmetric

Winning PnL is scaled while losses are not additionally scaled against the trader. The protocol therefore places most trading-economic friction on profitable closes.

Winning and losing settlement paths

A winning close removes value from protocol-side liquidity and may be subject to asymmetric impact and the documented settlement carve. A losing close contributes value to protocol accounting and can create eligible PAPER emission basis. These two paths are intentionally asymmetric because PAPER is tied to losses rather than to profitable closes.

PnL and PAPER are separate accounting results

Realised PnL is denominated in the trading account's USDC economics. PAPER is a token emission that can result from eligible losses under the active mint curve. A trader should therefore not treat minted PAPER as if it cancels a USDC trading loss one-for-one; the token has its own supply dynamics and staking utility.