# What Is $PAPER Worth?

> Papertrade traders now lose more than $20M a day, which drives $PAPER emissions and funds staking dividends. We value one staked $PAPER across daily loss levels and house insolvency scenarios: mining costs below $0.015 are likely profitable.

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> Author: ![](/images/brand-assets/logo.svg) Barker Research

## How Losses, Emissions and Dividends Connect

What makes Papertrade interesting is that it uses an elegant set of formulas to tie together traders' losses, $PAPER emissions and staking dividends.

There are only two core metrics: **daily gross trading losses drive token emissions, and traders' net losses fund $PAPER dividends.** The first brings dilution; the second brings value.

**$PAPER reward per $1 of eligible loss = 100 ÷ (1 + H ÷ 120M)²**

In the normal decay phase, H is the cumulative amount of eligible losses. The more losses accumulate, the less $PAPER each dollar of loss mines.

**Daily net loss = daily gross trading losses × (1 − p)**

p is the payout ratio: the net profits taken by winners (including profits waiting in the payout queue) as a share of gross losses. The remaining net loss, after fee distribution and house retention, funds staking dividends.

## Daily Gross Losses Now Exceed $20M

From October 11 to 14, estimated gross losses ran at about $20M every day, and October 14 had already passed $24M before the day was over.

| Date (UTC) | Est. daily gross losses ($M) | Trader net loss ($M) | Est. p |
|---|---:|---:|---:|
| Oct 11 | 21.78 | 3.78 | 82.6% |
| Oct 12 | 19.83 | 4.65 | 76.6% |
| Oct 13 | 19.81 | 4.52 | 77.2% |
| Oct 14 (partial) | 24.47 | 5.32 | 78.2% |

*Data as of 19:13 UTC on October 14, 2026; October 14 is not a full day. Gross losses are inferred from the mint curve; net losses come from official historical data. p = 1 − net loss / gross losses.*

Over the same days p ranged from 77% to 83%; I fix it at 77.2%. Compared with the size of daily losses and how long the business runs, whether p is 0.77 or 0.82 barely moves the result. So the valuation question becomes clear: **how much gross loss happens each day, and how long can this business last?**

Add one question you cannot avoid: when does the house get blown through? When house equity turns negative and winners' profits have to wait in a payout queue, I call it **house insolvency**. After that, does Papertrade end for good, or does it recover and keep running?

Put these assumptions together and you get the valuation matrix below.

## The Valuation Matrix

![$PAPER valuation matrix](/images/research/paper-token-valuation/paper-valuation-matrix.en-v2.png)

What the chart computes: **the present value today of all future USDC dividends received by one continuously staked $PAPER.**

Over the last few full days, gross losses were estimated at about $20M per day. I step this down to $10M, $5M and $1M to see how much value remains as the business shrinks.

The first four rows assume Papertrade hits its first house insolvency on day 30, 90, 180 or 360 and shuts down for good. The next two rows assume an insolvency every 90 days with recovery each time, counting 360 days of dividends and perpetual dividends respectively. The last row is perpetual operation with no insolvency.

To get a rough range, I made a few simplifying assumptions. They will not match reality exactly, but they are enough to show where the value lands: each insolvency drops house equity to −$10M; until it recovers to +$2M, each dollar of eligible loss earns a high emission of 100 $PAPER; and the whole table includes future dilution.

The discount rate is a uniform **100% per year**: $1 a year from now is worth $0.50 today. This is a very conservative assumption. It matters little for the scenarios that shut down early and mainly drags down the perpetual valuations. If you believe Papertrade can run for the long term, this rate is clearly too conservative, and the perpetual scenarios deserve a higher valuation premium.

The "shut down at first insolvency" rows are in fact self-contradictory: with $20M of daily gross losses, as long as trading continues, the model has the house back at +$2M in about 2.7 days. A crisis that heals in 2.7 days is hardly a real crisis, and the odds that the business keeps running rise sharply. Only when daily losses fall as low as $1M does filling the hole take about 44 days, and only then does recovery truly test participants' patience.

## Conclusion: Mining Costs Below $0.015 Are Likely Profitable

**How much is worth paying for $PAPER depends on how you see its future operation.** If you believe the current $20M of daily gross losses can last, or even grow, then an acquisition cost of $0.03 can still be profitable: with $20M a day and a first insolvency followed by shutdown at day 90, the model values $PAPER at about $0.0323, already above that cost.

**The 10 blue cells are the scenarios most worth weighing.** They range from about $0.0093 to $0.0488; if operation lasts at least 180 days, or the protocol recovers after insolvencies, the lowest highlighted value is about $0.0160.

**The 4 gold cells are the scenarios where the current scale keeps running:** if $20M of daily gross losses can hold or even grow, $PAPER is worth about $0.0657 to $0.1833 in the 360-day and perpetual scenarios, leaving plenty of room for its value to grow.

As things stand, **a mining cost below $0.015 is very likely profitable**. With Barker's [Paper hedge mining tool](/paper), which mines with long and short legs in the same account, the all-in cost per $PAPER is about $0.008 (the page estimates it from live data, service fee included). That is below all 10 scenarios; only the "$5M daily loss, shutdown at day 90" cell leaves a thin margin.

In the end, mining $PAPER is a bet on **how genuinely attractive Papertrade is to traders, whether today's average of more than $20M in daily trading losses can last, and whether the game goes on after the house gets blown through.**

## Data Sources

- Papertrade docs: [mint curve](https://docs.papertrade.xyz/#/how/mint-curve), [staking dividends](https://docs.papertrade.xyz/#/learn/staking-dividends), [solvency queue](https://docs.papertrade.xyz/#/how/solvency-queue)
- Papertrade official historical data (as of 2026-10-14 19:13 UTC)
- Barker Research valuation model (starting point 2026-10-14 19:17 UTC)

*All data in this report comes from public disclosures and public on-chain data and does not constitute investment advice.*