Pika Protocol continues to prove itself as a Real Builder in the crypto market when it launches Pika V4 with many upgraded features compared to the most recent version, Pika V3. In this article, we will look back at Pika Protocol after updates to see what this protocol has changed in recent times.
To understand more about this article, people can refer to:
- What is Optimism (OP)? Overview of Cryptocurrency Optimism
- What is Pika Protocol (PIKA)? Pika Protocol Cryptocurrency Overview
Pika Protocol’s Journey of Change and Development
Pika V1: Derivatives-Powered Stablecoin Protocol
On April 13, 2021, the development team of Pika Protocol first introduced to the community the first version, Pika V1, including two main components: Pika Exchange and Pika Stablecoin.
- Pika Exchange: Is a Perpetual platform that allows users to Long – Short different types of Crypto Assets. Pika Exchange uses the same vAMM model as Perpetual to help traders achieve low slippage with small amounts of liquidity.
- Pika Stablecoin: Is a Stablecoin that is minted when a user opens a Short position with 1x leverage for some types of Crypto Assets on Pika Exchange such as ETH, wBTC,…
It only took 6 short months for the Pika Protocol development team to realize that their two products were not well received by the community and they could only choose one, Pika Exchange or Pika Stablecoin, to focus on developing. development. And that is the reason for the birth of Pika V2.
In fact, in the mid to late 2021 period, developing a Perpetual has more opportunities to help them lead the Optimism ecosystem than building a Stablecoin to compete directly with USDT and USDC. Remember that Optimism is a Layer 2 on Ethereum, so moving stablecoins between Layer 1 and Layer 2 and even between the exchange and Layer 2 is much simpler.
Pika V2: Focus on Perpetual
Pika V2 has completely eliminated the Pika Stablecoin model to focus on building and developing Pika Exchange towards leading the Derivatives segment on the Optimism ecosystem. Some highlights on Pika V2 include:
- Deep Liquidity: Pika V2 continues to use the vAMM model towards increasing capital efficiency and limiting price slippage without needing too much liquidity.
- Dynamic Pricing: Pika Protocol will use Chainlink Oracles with Dynamic Pricing to determine asset prices with formulas Trade Price = Base Price * Slippage + Price Adjustment.
- Trade Anything: With the vAMM model, Pika V2 allows trading of any Crypto Assets available on the market. In the long term, Pika will have access to both assets and indices in TradFi.
- Composability: DeFi protocols can easily integrate Pika Protocol to create profit-making tools for their users.
- Fees: Because it is deployed on Optimism, transaction fees on Pika Protocol are relatively cheap while still inheriting the security and decentralization from Ethereum.
- Liquidation: The difference between the entry price and the liquidation price will be used to pay the liquidator, liquidation fee and liquidity provider.
- Arbitrage Mitigation: Because Chainlink Oracles sometimes have delays, causing bots to take advantage of the opportunity to arbitrage. Inspired by GMX, Pika Protocol also offers solutions to limit arbitrage by bots.
- Liquidity Vault: Users provide liquidity to different vaults and stand opposite the Traders. LPs receive profits from trading fees, liquidation fees and interest on transactions.
Besides the above outstanding features, Pika Protocol also supports leverage up to 50x for traders. It can be said that in the Pika V2 version the project has completely transformed to become a truly Perpetual platform on Optimism. However, it is clear that Pika V2 still cannot be considered a complete Perpetual when the leverage is still low, the fee mechanism is not diverse, the order types are few,… That is why we have Pika V3 .
Pika V3: Continuing to upgrade from the momentum created from Pika V2
Pika V2 is a move that has helped Pika Protocol achieve a number of positive metrics such as:
- More than 16,000 new users joined.
- Generate more than 100,000 transactions.
- With a total trading volume of up to $500M.
In the next version, Pika v3 continues to improve Pika V2 in a more diverse direction, helping users have more choices when using Pika Protocol. Some outstanding upgrades on Pika Protocol include:
- Supports new trading orders including Limit Oders and Stop Oders.
- In version V2, users had to wait up to 4 hours and the order had a fluctuation of about 3% to close the order. In V3, the combination of many different Oracles allows users to open and close their Long – Short orders at any time. any time.
- Also thanks to the combination of many different Oracle solutions allows V3 to have a higher level of liquidity along with lower price slippage compared to V2.
- Launching Funding Fees.
In this version, Pika Protocol has helped Pika Protocol continue to improve itself to become more and more similar to a Perpetual on CEXs such as Binance, FTX,… Integrating many Oracles has helped Pika Protocol solve many remaining problems. backlog on its protocol.
Pika Protocol V4: Continue to optimize version V3
The new Pika V4 version was updated in early July 2023 with many positive changes to the protocol. Some outstanding upgrades include:
- Pyth Network integration is at the heart of V4. With Pyth, Pika Protocol becomes more flexible and reliable in the eyes of users. Integrating Pyth also helps Pika Protocol expand to up to 40 trading pairs in just a period of 2 – 3 months, including many assets and indices coming from TradFi.
- Trading fees for base pairs like ETH and BTC will reduce trading fees from 0.08% to just 0.05%. This fee can be further reduced if users participate in the transaction fee discount program from Pika Protocol.
- Continue to increase leverage to 200x.
- Allows users to TP and SL at the same time the user can open a new trading order. This is summed up in just 1 transaction.
- Pika V4 also supports low leverage of only 0.5 times, helping users access assets not available on the Blockchain without worrying about liquidation risk.
- Pika Protocol has also integrated with Trading View to help traders’ experience become more complete and complete.
The Battle Between Perpetual, Pika Protocol & Kwenta
Some basic indicators between Perpetual, Pika and Kwenta
Currently, Perpetual, Pika Protocol and Kwenta are the largest Perpetual platforms on the Optimism ecosystem. Every project has its differences. Let’s take a look at some of the achievements of the projects from the first days of development until now.
|
Index |
Perpetual |
Kwenta |
Pika Protocol |
|---|---|---|---|
|
Total Trading Volume |
+ $19B |
+ $16B |
+ $1.5B |
|
Total Trader |
+ 340K |
+ 240K |
+ 700K |
|
Total Users |
– |
+ 10K |
+ 280K |
|
1M Trading Volume |
+ $748M |
+ $5B |
+ $70M |
Reality shows that Pika Protocol is completely behind compared to major competitors on Optimism in most indicators. Although the number of traders is much higher than Perpetual or Kwenta, the amount of volume generated is too low. It is likely that these are all users who come to Pika Protocol because of retroactivity, not real traders.
Hopefully, in the next V4 version, combining model upgrades that significantly increase the number of trading pairs and using PIKA as incentives for traders, Pika Protocol will have more positive results. .
|
Index |
Perpetual |
Kwenta |
Pika Protocol |
|---|---|---|---|
|
Transaction fees |
0.02% maker 0.06 – 0.1 taker base $2 for the execution fee |
0.02 – 0.1% $2 for the execution fee |
0.05% for BTC/ETH 0.1% for Crypto Assets 0.02% for Forex |
|
Number of pairs |
20 |
42 |
22 |
Currently, only Perpetual and Pika Protocol are running their products organically, while Kwenta has many OPs as incentives for its Traders. Therefore, the assessment that Kwenta is too far behind the remaining platforms is not too accurate. But if we only compare Pika Protocol and Perpetual, it is enough to see that Pika still has a lot of work to do if it does not want to lose the entire market to Perpetual and Kwenta.
Some few advantages of Pika Protocol
Pika Protocol has certain advantages on the trading side, however, in Trading, fees are only one of the reasons for traders to choose, besides the number of trading pairs on Pika is quite limited. One of the advantages for Pika Protocol to change its position in the near future is to apply Tokenomics well to attract users.
In my opinion, some of the activities that Pika Protocol needs to implement in the near future to regain its position include:
- Using PIKA makes sense to attract liquidity, traders and users. Use should be calculated to avoid causing adverse effects to the protocol. Remember that Liquidity Mining is a double-edged sword.
- Pika Protocol should have activities such as AMA, Trading Competition,… to attract users and traders to its protocol.
- There should be suggestions about asking for OP from Optimism Collective to implement incentive campaigns. If we get OP, Pika Protocol’s campaign will be more effective and legit.
- Continue to improve products to better suit traders and users.
Summary
Pika Protocol is a prominent Perpetual protocol in the Optimism ecosystem. However, amidst great pressure from Perpetual and Synthetix, it is understandable that Pika Protocol is taken over. If you look at Arbitrum, GMX is almost the first and only one, so it doesn’t have terrible pressures like Pika.
In your opinion, with the constant changes, will Pika Protocol be able to surpass Perpetual on Optimism in the near future?
