Papertrade LP & Payout Queue — Liquidity and Solvency
What Papertrade traders are trading against, where the LP balance comes from and what happens when a winning payout cannot be paid immediately.
The Papertrade LP
The LP starts without a conventional seeded pool and grows through cumulative protocol trading economics. It is not a public deposit vault.
The payout queue
If LP reserves are insufficient for the profit portion of a winning close, the unpaid amount can enter a FIFO payout queue and is serviced as solvency returns.
What is and is not queued
The documentation distinguishes winning profit from user margin. Margin is returned to available balance on close; only unpaid profit can wait in the payout queue.
What this means for traders
A solvent winning close pays immediately. An underfunded profit becomes onchain debt awaiting queue harvest rather than being permanently haircut.
PAPER emissions are designed to be strongest while the LP is small or underwater.
Related Papertrade Guides
Frequently Asked Questions
Why does Papertrade have a payout queue?
The FIFO queue handles eligible winning profit that cannot be paid immediately from available LP liquidity.
Is the queue the same as open interest?
No. Open interest measures active exposure; the payout queue tracks eligible unpaid winning profit.
Where can I read lower-level solvency accounting?
See the Solvency and Queue technical page for sideBucket and LP accounting details.