Papertrade Liquidations — Bust Price, Margin & Leverage

How Papertrade displayed bust trigger differs from a voluntary close, and what a hard liquidation means.

The bust price

Each position has a displayed bust price that triggers the protocol hard liquidation path. Crossing that trigger forfeits the isolated margin rather than executing a normal voluntary close.

The liquidation buffer

The documentation describes a small fixed buffer, roughly five basis points of price, between the bust trigger and the zero-equity reference used by the voluntary-close path.

When liquidation fires

If BBO mid crosses the bust price, a liquidation transaction can remove the position under the hard-bust path. The lost margin is routed through LP or payout-queue accounting, and the loss can mint PAPER.

Who runs liquidations

The liquidation function is described as a public maintenance path. The protocol operates keepers, but the function itself is not reserved to a single official liquidator.