PaperTrade Protocol Exposed to BBO Price Manipulation Risk

ChainCatcher reports: Crypto trader Rune said on X that PaperTrade's official documentation exposes a flaw in the protocol-level pricing mechanism. Screenshots shared by Rune indicate that attackers could manipulate prices via Hyperliquid's order book BBO (Best Bid and Offer), with the risks spanning unresolved price-manipulation pathways, contract economics and exposure controls, and operational safeguards and permission management. Rune also shared a post from community user boblob, who found that two wallets appeared to be actively exploiting the flaw on PaperTrade. Trades totaling roughly $20 million moved ETH on Hyperliquid by about 10 to 20 basis points. Boblob said the protocol's obvious problems need urgent fixes, or its long-term sustainability could be at stake.