Pika Protocol Reviews: Trade Crypto And Forex With Up To 200x Leverage?
Pika Protocol reviews is a revolutionary decentralized perpetual swap exchange built on top of Ethereum’s layer 2 blockchain technology.
This innovative platform offers users access to high leverage and deep liquidity, making it an attractive option for traders of all levels of experience. With its permission-less smart contract architecture, Pika Protocol is fully composable with the entire DeFi ecosystem, providing users with seamless integration and access to a wide range of financial products and services.
About Pika Protocol
Pika is one of the DeFi protocols with the highest leverage as it offers up to 100 times leverage on trades. The users can also swap tokens right in their wallets without even depositing at all. With the way Pika runs on layer-2 protocols, it costs lower gas compared to a direct transaction on the Ethereum mainnet. While it is a crypto trading protocol, Pika’s product offerings are wider than Web3 because it further taps into non-Web3 assets.
Pika Protocol is a groundbreaking decentralized platform that is transforming the way we transact on the blockchain. With its cutting-edge technology and innovative design, Pika Protocol is built to provide fast, secure, and scalable transactions on the Ethereum blockchain, and is poised to become one of the most popular blockchain platforms in the world.
One of the key features of Pika Protocol is its ability to eliminate intermediaries, which makes it an ideal platform for developers and users who are looking for a more efficient and transparent way to transact on the blockchain. This means that transactions can be completed quickly and securely, without the need for third-party intermediaries, which can often slow down the process and increase costs.
Pika Protocol is highly secure and transparent, which makes it a great option for businesses and individuals who are concerned about the security of their transactions. The platform uses advanced encryption techniques to ensure that all transactions are secure and can be tracked on the blockchain, making it a trustworthy and reliable platform for businesses and individuals alike.
Pika Protocol is built to be scalable, which means that it can handle a large volume of transactions without slowing down. This is a key advantage for businesses and individuals who need to transact on the blockchain at a high volume and ensures that the platform can continue to function efficiently even as it grows in popularity.
Pika has its liquidity concentrated around the current oracle price, making it possible to achieve the same level of liquidity as top perpetual exchanges. This enables capital efficiency and minimum trade slippage without requiring too much exchange liquidity. Specifically, Pika has zero slippage for major pairs like ETH, BTC, and forex.
Pika uses the on-demand decentralized Pyth oracle to decide the marked price. Whenever an order is submitted, the keepers will fetch the price from the Pyth price feed and update the mark price on-chain before executing the order. To safeguard the accuracy of the low latency oracle, Chainlink oracle is used for most of the pairs with a bid/ask spread whenever the fast oracle is not updating or its price deviates too much(2%) from Chainlink prices. In addition, traders can set an allowed slippage for each order submission, to make sure the order is executed only if the mark price is within the allowed slippage range.
Pika has zero slippage for ETH, BTC, and forex pairs, for each the trading price is almost the same as the mark price.
Mark Price: Pika gets the real-time fast Oracle price as the base price.
Slippage: the trade slippage is calculated based on the virtual liquidity, trade amount, and trade direction, using the xyk model.
Price Adjustment: to reduce the risks to the LPs, Pika has the mechanism to balance the open interest of longs and shorts. When there are more longs than shorts in the protocol, the bid price will increase slightly to incentivize fewer long positions, and vice versa.
Pika Protocol empowers users to trade both crypto and non-crypto assets with leverage. It can support any asset as long as there’s a reliable price feed.
Unlike many other derivatives exchanges, Pika allows traders to swap directly from their wallets without any depositing steps.
Pika Protocol was launched on the Optimism network, providing users with low transaction costs relative to layer-1 Ethereum. Other than the user gas fee, there are two parts of fees:
Execution Fee: a small execution fee(~0.0002 ETH) is charged when an order is submitted, which is paid to keepers who are responsible to execute the submitted orders with the latest Oracle update.
Trade Fee: a small trade fee(0.05% for ETH/BTC, 0.1% for other crypto pairs, and 0.02% for forex) is charged for each trade. 50% of trade fees are distributed to the vault(liquidity providers), 30% to PIKA token stakes, and 20% to the protocol.
Pika has a funding mechanism to balance the longs and shorts for each trading pair, reducing the risk for a liquidity vault. When there are more longs than shorts, longs pay shorts, incentivizing more traders to short. When there are more shorts than longs, shorts pay longs, incentivizing more traders to long. Since the liquidity vault is always at the minority side, it always receives funding. The funding rate of each trading pair is updated every time a trade is made for that pair, and the funding is paid or received when positions are closed. The annual funding rate is calculated as follows:
Pika supports 3 types of orders: market, limit, and stop. The market orders are sent to be executed immediately once it is submitted. For limit and stop orders, they are submitted to be stored in a smart contract instead of centralized servers, with the aim to be as trustless as possible, and are triggered by keeper bots once the price requirement is matched.
Take-profit and stop-loss orders are a special type of limit and stop orders, which can be created together to close positions within 1 transaction.
The protocol is backed by liquidity providers. By staking in the vault, the liquidity provider takes the opposite position of all traders on the platform. The vault pays for trader profits and receives trader losses. In addition, it also receives trading fees, funding payments, and liquidation profit of trades.
To protect the vault from big losses in highly volatile conditions, the vault has a maxExposure parameter for each trading pair. When the maxExposure is reached, traders cannot open the additional position that increases the vault’s exposure but can open the position in the direction that decreases the vault’s exposure. This should rarely happen when the vault’s liquidity is big enough.
The APY shown for the vault is calculated based on the fees distributed to the vault in the last 7 days.
Crypto and Forex Trading
BTC and ETH have 0.05% trading fees and other crypto pairs have 0.1% trading fees, while forex pairs have 0.02% trading fees because of their lower volatility.
Traders are offered the opportunity to receive up to a 50% discount on these fees. The discount amount is determined based on the trading volume over the past 30 days, as well as the number of PIKA tokens staked by the trader. This is outlined in the following fee structure: https://www.pikaprotocol.com/#/fees
For crypto pairs, the market is live 24/7.
For forex pairs, the market is closed from Friday 4 pm EDT to Sunday 5 pm EDT, and closed on these holidays:
- December 25th – 27th
- January 1st – 3rd
Traders cannot close positions using the UI when the market is closed and if they close it via smart contract, a big slippage will be involved.
The stop loss orders for forex may not work if the market opens at a different price than the price it closed at last time it was open, which could results in unexpected liquidations or profit. Therefore, traders are recommended to be careful with keeping orders open when market is closed.
What is PIKA token?
Pika Protocol has a two tokens: PIKA and Escrow PIKA(esPIKA)
PIKA is the utility token of Pika Protocol:
- PIKA can be staked to access 30% of platform trading fees.(PIKA is locked for 14 days for staking)
- PIKA can be staked to get trading fee discounts.
Escrow PIKA(esPIKA) is a non-transferable token that can be vested for one year to unlock PIKA. The lock-up mechanism will begin with a 90% fee for vesting PIKA which will decay linearly to zero. Any fees for redeeming earlier than one year will be sent to the treasury growth fund. After one year, esPIKA becomes 1:1 with PIKA.
PIKA has a total supply of 100m and and initial circulating supply of 19 million following the token generation event(TGE).
19%: Token generation event
30%: Future platform rewards for liquidity providers, traders and PIKA stakers. All rewards are distributed as esPIKA over next 3 years. The reward tokens are held in a vesting contract with a three-year linear vesting schedule. They will be distributed periodically once they have been unvested.
20%: Growth fund for exchange liquidity, operations, grants and marketing. 6% is to provide exchange(DEXes and CEXes) liquidity after TGE and the rest is linearly vested over next 3 years
20%: Core contributors and advisors(vested linearly over 2 years)
11%: Retroactive and future airdrops(distributed as esPIKA)
Traders need to have both USDC and ETH on Optimism network to open a trade. USDC is used as the margin token and ETH is used to pay for gas fee.
You can use any of these bridges to to transfer tokens to Optimism network:
On Optimism network, you can use Uniswap to swap ETH to USDC or USDC to ETH.
Switch your Metamask wallet to to the right blockchain and connect it to the trade page. Click the product list on the right and select the trading pair you want to trade.
After selecting the “Market” on the top right section, choose
SHORT and input the
Size of the trade you want to open. The value in blue is the maximum size you can open based on your available USDC balance and your selected leverage. The
Margin amount is automatically calculated based on your size and selected leverage. The margin is the amount of USDC you will transfer as the margin for this trade.
After that, the summary of the trade is updated.
Mark Price is the current oracle price.
Entry Price is the estimated trade price if you open the trade.
Price Impact is the estimated price impact of your trade.
Liquidation Price is the estimated price of your position get liquidated.
Trade Fee is the trade fee to be charged.
Execution Fee is the fee to cover the gas cost of Pika keeper.
Total Cost is the sum of margin, trade fee and execution fee.
If it’s your first time trading on Pika, you would need to approve Pika contract to transfer your USDC and enable Pika keepers to submit market orders for you by agreeing with the terms.
Then after clicking the
Submit button, the confirmation will show up with the order details. Then you can check the details before you click
Allowed Slippage is too low or the price is too volatile, your order may be cancelled. The slippage value can be set at the top right of the page.
The sumitted orders will be picked up within few seconds by keepers to be executed with the next oracle update. You will receive notifications when the order is executed successfully and then you can see the active positions. If the order fail to be executed, you will be notified of the reasons and the orders will be automatically cancelled.
If you want to add take-profit and stop-loss orders for your position when creating the market order, you can select them and bundle them in one transaction.
Limit and stop order sumission work similarly as the market order. The only difference is you need to specify the trigger price for these orders.
The sumitted limit and stop orders will show up in
Orders tab, where you have the option to edit the price of each order or cancel it. If the order cannot be submited by the keeper, it will have red error message and you need to cancel and resumit the order.
After the order is successfully execyted, the position appears in the
Active Position list with the position details.
To add or remove margin for an existing position, click
Edit button and input the margin to add or withdraw. Click
Submit button to submit the transaction after confirming the new position details.
To close a position, click
Close button of the position and then input the amount of the margin to close. Same as open position, you have the option of
TP/SL order type. You can either close the whole position or close partially.
A trade record appears in the
Trade History section after the position is closed, recording the position details.
Pika Protocol is a powerful decentralized platform that is poised to revolutionize the way we transact on the blockchain. Its potential for growth and adoption is truly limitless, and it is a platform that is definitely worth considering for businesses and individuals who are looking for a more efficient, secure, and transparent way to transact on the blockchain. With its advanced technology and innovative design, Pika Protocol is setting a new standard for blockchain-based transactions, and is sure to be a major player in the world of cryptocurrency for years to come.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.