Paper is a share of the house. It is minted to you when you lose, and only then: there is no pre-mint, no team allocation and no sale. It is a plain ledger entry in your UserAccount, not a token. It cannot be transferred, sold or lent.
Paper earns half of every fee charged and all surplus swept above the reserve cap, in proportion to how much of it you hold. See Rewards.
The basis
| Event | Paper basis |
|---|---|
| Losing close, queue empty | loss − fee |
| Losing close, queue open | loss |
| Liquidation | the full margin, fee or not |
The rate
The rate is read before your own settlement changes the house.
if tracked_lp < flatThreshold: rate = flatRate flatRate = 100otherwise: H = max(hwm, tracked_lp − flatThreshold)hwm = H one-way ratchetrate = flatRate × (S / (S + H))² S = tailScale = $1,500,000
Below $25,000 of net house equity (flatThreshold), negative values included, every $1 of basis mints 100 paper. Above it the rate decays slowly, so the losses that built the house when it was small own more of it.
The high-water mark
hwm only goes up. Excess sweeps do not lower it, and neither do later losses of the house. Once the house has been large, paper stays harder to mint, even if the house shrinks again.
Rates
| tracked_lp (H) | Paper per $1 |
|---|---|
| below $25,000 | 100.00 |
| $50,000 (H = $25,000) | 96.75 |
| $75,000 (H = $50,000) | 93.65 |
| $100,000 (H = $75,000) | 90.70 |
| $275,000 (H = $250,000) | 73.47 |
| $525,000 (H = $500,000) | 56.25 |
| $1,025,000 (H = $1,000,000) | 36.00 |
| $1,525,000 (H = $1,500,000) | 25.00 |
While the excess sweep runs, anything above $75,000 leaves the house whenever the queue is empty, so tracked_lp rarely stays far above the reserve cap. In practice the rate moves with the high-water mark.
Units
Paper has 6 decimals and is stored as a u128. 100 paper per $1 means 1,000,000 USDC base units (one dollar) mint 100,000,000 paper base units.