> For the complete documentation index, see [llms.txt](https://docs.paperstrategy.xyz/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.paperstrategy.xyz/the-loop/acquiring-paper.md).

# Acquiring PAPER

How the accounts turn USDC into PAPER, and what the strategy looks at.

PAPER is minted from trading losses on Papertrade. So the accounts trade on Papertrade and **lose on purpose, in a controlled way**. Every dollar lost mints PAPER at the current mint rate. The whole job of the strategy is to lose each dollar at the best possible moment and at the lowest possible cost, and to stake everything it receives.

## How it works, in short

* Positions are opened in **pairs**: a long and a short on the same market, same size. Whatever the price does, one side loses and mints PAPER while the other side gains almost as much back. The net cost of the pair is Papertrade's impact on the winning close, not the full loss. That is what makes PAPER cheap to acquire.
* The strategy can also open **one-directional positions** when conditions favour it, for instance to convert faster while the mint rate is high.
* **Leverage and target** set how fast a pair converts. High leverage converts quickly but leaves little room before liquidation; the strategy keeps a safety margin below the liquidation distance at all times.
* When the mint rate is about to **fall fast**, converting sooner is worth a higher cost, and the strategy accepts larger, faster losses. When the rate is stable, it slows down and lets the cheaper method work.

## What it looks at

Everything the strategy uses is public or measurable:

|                                          |                                                                                                        |
| ---------------------------------------- | ------------------------------------------------------------------------------------------------------ |
| Mint rate                                | Papertrade's rate right now, and its two regimes (flat below the LP threshold, then decaying)          |
| LP growth                                | How fast Papertrade's liquidity pool grows, in dollars per hour: the speed at which the rate will fall |
| Open interest headroom and position caps | How much each market and each account can still take                                                   |
| Impact curve and liquidation distance    | The real cost of a cycle, and the room to keep before a liquidation                                    |
| Market volatility and relayer latency    | How far a target can sit, and how much the price can move while an order waits                         |
| Payout queue and capital per account     | How much is really usable, and how the queue changes the rate                                          |
| Cost per PAPER so far                    | Every closed cycle's loss, gain, net cost and PAPER minted                                             |

## What stays private

The exact rules: thresholds, leverage schedule, targets and timers, which market is picked, and the live positions. The strategy competes with everyone else for the same PAPER, and publishing its rules would let others trade against the treasury. It is judged on what anyone can measure: USDC deployed against PAPER staked, per account, on-chain.


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