Pika Protocol is a stablecoin protocol backed by decentralized derivatives. It consists of two components: Pika Exchange and PIKA stablecoin.
Pika Exchange is a perpetual swap exchange that supports leverage trading. It supports token based inverse perpetual swaps. The underlying of the exchange is a virtual automated market maker(vAMM).
PIKA Stablecoin is a stable currency backed by Pika Exchange with these features:
Stable: it uses perpetual swap positions to back its price stability around a 1 dollar target. PIKA is minted by opening a 1x short position of an inverse perpetual swap.
Capital Efficient: a PIKA is minted by depositing one dollar value of supported tokens(e.g., ETH, WBTC), achieving better capital efficiency than overcollateralized stablecoins.
Yield-bearing: yields are generated from trading fees of perpetual contract exchange.