The encryption trader, Jez, announced today the new protocol he's developed on HyperEVM, PaperSmart, which generated a lively discussion in the English encryption community。

Jez is the long-term preacher of the lasting contract, and he was at the top of the air drop score in Lighter and Varial in the early silo Hyperliquid. This time, he personally went down and made a Perp DEX that had no fees, no slide points and no financial rates。

The ancient Casino in exile

The PaperSmart mechanism has a disgraceful predecessor in financial history. In the 1900s, in a small town in the United States of America, there was a stock company brand, behind which the real-time offer of the New York office was copied with chalk, but the client's list never left the shopkeeper's drawer. It's essentially a gamble between a client and a shopkeeper. This business was banned by New York state legislation in 1909, and it was largely extinct in the 1920s。

When users open or flat in PaperSmart, the Platform will read directly the order book price of Hyperliquid and settle directly for the public LP pool at the difference between the opening and the warehouse. There was no order throughout the process to enter Hyperliquid's blending system, nor was there any real renewal of contract. The parties to the deal are always users and LP pools, no third-party rivals。

End of contract + P2P + DeFi Pong

PaperSmart drew on DeFi mining and P2P lending models。

The user's losses on PaperSmart will remain intact in the protocol LP pool, and the user's profits will be pumped from the platform. The smaller the price volatility, the more profitable the collection. In other words, the more the user earns, the less the agreement draws。

Unlike HLP, the PaperSmart LP pool does not have a pre-assessed team, VC notes, and does not accept any form of external deposit at all. Its only source of funding is the user-deficit bond。

THE QUESTION IS, IF THERE'S ONLY $100 IN THE LP POOL, BUT THE USER EARNS $5,000, HOW DOES THE PROTOCOL WORK

PaperSmart moved the traditional P2P lending line to the chain。

The $5,000 will go into a sequenced line, waiting for the next loss sheet to come in and fill the hole, and the line will be paid in order. The principal of the user is always returned in the first place and only the profit portion is queued。

THEORETICALLY, LP CAN BE PHASED "INSOLVENCY", BUT EVERY WINNER WILL EVENTUALLY BE PAID OFF UNLESS THE LOSING LOSES CANNOT COVER THE PROFITS THAT THE PLATFORM OWES THE WINNER。

IF THIS IS OVER, THEN THE PROJECT IS DOOMED TO DEATH, BECAUSE IF THE LP POOL DOESN'T HAVE THE MONEY, IT MEANS THAT THE WINNER MAY HAVE TO WAIT A LONG TIME TO GET IN LINE TO GET THE PROFITS, THAT THERE IS NO INCENTIVE TO TRADE, THAT TRADERS ARE LEAVING, THAT THERE ARE NO LOSERS, AND THAT THE MONEY THE PLATFORM OWES TO THE WINNER WILL BE BAD。

PaperSmart's essence is its token。

FOR EACH DOLLAR THE USER LOSES, THE PROTOCOL CREATES A CERTAIN NUMBER OF PAPERS BY CURVE。

WHEN THE LP BALANCE IS LESS THAN $2 MILLION, THE CASTING RATIO IS FIXED AT 100 PAPERS PER LOSS OF 1 USD; AFTER THE LP EXCEEDS $2 MILLION, THE RATE STARTS TO DECLINE, THE MORE THE LP BALANCES, THE LESS THE PAPERS ARE FORGED。

CROSS-AXIS: NUMBER OF PAPERS RECEIVED PER UNIT OF LOSS; VERTICAL AXIS: LP BALANCE (SET TO 1M)

PAPER WILL RECEIVE A BONUS OF TWO PARTS, THE AGREED DRAW INCOME, AND THE EXCESS WILL BE FULLY ALLOCATED TO THE PLEDGE WHEN THE BALANCE EXCEEDS $5 MILLION。

IN OTHER WORDS, THE SIZE OF THE LP POOL WAS DESIGNED TO HAVE A $5 MILLION CEILING, BEYOND WHICH THE USER ' S LOSS WOULD BE RETURNED TO THE HOLDER OF PAPER. THIS RESULTED IN A CLOSED CIRCLE OF "LOSERS GETTING SHARES IN THE PLATFORM, WINNERS TAKING MONEY FROM LOSERS, AND PLATFORMS PUMPING WATER TO FUND LOSERS."。

THEREFORE, A REASONABLE PARTICIPATION STRATEGY CAN BE SUMMARIZED AS: A LOW LVL IN THE LP POOL TO MAKE THE PAPER AT A LOSS, AND A HIGH LVL PLEDGE TO THE PAPER IN THE LP POOL。

HyperEVM pressure test

According to the writer, the greatest uncertainty in PaperSmart is its deployment of HyperEVM。

PaperSmart is simply using Hyperliquid's offer as a prophecies for free, with all the logic remaining in HyperEVM's contract。

This means that any high-performance chain with similar performances can reset the entire mechanism of PaperSmart on its own chain if it is willing to access an external price predictor. The recaptors can even provide what HyperEVM cannot: lower gas, higher TPS, more generous early subsidies, more radical token incentives。

During last year ' s Q1 HyperEVM meme season, after a slow chain-up and a costly period, PaperSmart's on-line was another test of HyperEVM。