Paper Tube has a good chance to drop from the EoC, EoW/BoC and Queen Bee.
Using them in your inventory (the same way as if you would summon bosses) will unlock a random Pre-Hardmode accessory for you to buy from the Tinkerer's shop.
Look at all the existing Paper Tubes.
There is currently a glitch to sell a paper Tube multiple times. Have autopause on and spam the sell button. You will get paid each time you click if you had at least one in your inventory.