KuCoin AMA With Pika Protocol (PIKA) — Decentralized Leverage Trading on Optimism

Time: June 13, 2023, 12:00 PM - 12:55 PM (UTC)

KuCoin hosted an AMA (Ask-Me-Anything) session with the founder of Pika Protocol, Ethan, in the KuCoin Exchange Group.

Official Website: https://www.pikaprotocol.com/

Whitepaper: Click to view

Follow Pika Protocol on Telegram and Twitter.

Ethan — Founder of Pika Protocol

Q: Please share an overview of the Pika Protocol and its primary objectives.

Ethan: Pika protocol is a decentralized perpetual swap exchange, supporting up to 200x leverage on over 25 trading pairs, including crypto and forex assets.

We have been building Pika for over two (2) years, and the objective of Pika is to become a top decentralized exchange with the same level of user experience as centralized exchanges while remaining decentralized, non-custodial, and permissionless.

Q: Whatblockchain is Pika built on? Also, what made you guys choose that particular chain?

Ethan: Pika is built on Optimism, an Ethereum layer 2. We were one of the earliest projects to launch on Optimism in 2021. We chose Optimism because it's much more scalable than Ethereum while inheriting Ethereum's security.

With the recent Optimism Bedrock upgrade, Optimism is becoming the rollup with the lowest gas price and much shorter confirmation time. This enhancement greatly improves the user experience on Pika.

Furthermore, its roadmap of OP Stack also greatly aligns with Pika, which allows Pika to build an app chain that further increases user experience in the future.

Q: What are some significant milestones that the Pika Protocol has achieved so far?

Ethan: Over the last two (2) years, we have launched multiple versions of products.

● Sep '21: v0 - Derivatives-backed stablecoin

● Nov '21: v1 - 1st perp exchange on Optimism

● Jan '22: v2 - Pika Perp Exchange official launch

● Jul '22: v3 - Stop/limit orders, dynamic funding, forex trading

We are proud to have over 280,000 users(addresses) and over 1.5 billion in trading volume. We're in our third version and preparing to launch v4 in a few weeks.

Q: Can you share about the upcoming Pika v4?

Ethan: Pika V4 is an incremental upgrade from Pika V3, providing the following improvements:

● Replacing the in-house fast oracle with a decentralized low-latency Pyth oracle. This makes order settlement fully trustless.

● Expanding to more than 40 trading pairs.

● Supporting stop loss/take profit orders within the same transaction when opening/closing positions. Supporting both adding and withdrawing margin for active positions.

● Enabling PIKA token staking, which accesses 30% of protocol trading fees.

Pika V4 is expected to launch in a couple of weeks.

Q: What will Pika v5 look like?

Ethan: Pika v5 aims to become a decentralized exchange with the same level of trading experience as centralized exchanges while retaining the non-custodial and trustless properties of DeFi.

Pika v5 will be built on Pika Chain, a layer-3 app chain built on top of the OP Stack. It inherits the same codebase of Optimism Bedrock while customizing the chain settings to be better adapted to an exchange use case. Pika v5 will be a hybrid of AMM and an order book-based exchange.

Pika v5 is expected to launch next year.

Q: Decentralized perp trading has grown significantly over the last two (2) years, yet it still comprises a small fraction of the total crypto perpetual trading volume. What should/could be done to grow the market 10x or 100x in the next few years?

Ethan: We are quite excited to see this sector with such big growth in the last two (2) years, but it's still quite early.

Perpetual swaps are an extremely popular product in the crypto market. Most centralized exchanges' volume comes from this product rather than spot trading. While the user experience with DeFi, for now, could be better with centralized exchanges, the reduced costs associated with layer-2 have been able to provide a decent trading experience. We already definitely do have a lot of users, and we are not the only ones.

In the future, especially with reduced costs after EIP4844 and developments of app chains, decentralized perpetual exchanges will be able to provide a user experience that matches centralized exchanges. With all the upgrades and developments, our industry can achieve this growth within the next year or two.

Q: Tell us about your partners.

Ethan: The priority of Pika has always been building great products people can use. That being said, we have many great partners that helped shape Pika into what it is today. For example, we are partners and integrators with Optimism, Chainlink, Pyth Network, The Graph, Arrakis Finance, and Li.Fi, Blast API, and more.

Q: How do you plan to improve the interaction with new users and users outside the crypto space?

Ethan: We have been consistently hearing our user feedback in our channels and made improvements accordingly for the past two (2) years. The improvements are done every week. The objective of Pika is to become an exchange with the same or better level of experience compared with the current top centralized exchanges.

Q: Please share some plans for the current year.

Ethan: Our top priority right now is the launch of v4, grow it, launch token staking and rewards program!

Q: I understand that Pika Protocol was launched on the Optimism network; what factors led you to consider Optimism as the best option for your exchange? Do you want to reach out to other chains?

Ethan: We chose Optimism because it is one of the earliest layer 2 launched, and it's currently the cheapest rollup with the recent upgrade. We do not have short-term plans to launch on other chains, but we would also be open to other opportunities after our v4 is mature.

Q: Can you provide more details about the liquidity vault and how it supports the protocol? How are profits and losses distributed among liquidity providers?

Ethan: The USDC vault provides liquidity to traders. By staking in the vault, you take the opposite position of all traders on the platform. The vault pays for trader profits and receives trader losses. When traders lose, the vault wins. When traders win, the vault loses. In addition, it also receives trading fees, funding fees, and liquidation profit from trades.

🎁 Participate on the Pika Protocol AMA quiz now for a chance to win 10 USDT!

The form will remain open for five days from publishing this AMA recap.

KuCoin and Pika Protocol have prepared a total of 2,000 USDT to give away to AMA participants.

1. Pre-AMA activity: 1,000 USDT

2. Free-ask section: 50 USDT

3. Flash mini-game: 400 USDT

4. Post-AMA quiz: 550 USDT

. . .

Sign up for a KuCoin account if you haven’t done so yet!

Follow us on Twitter, Telegram, Facebook, Instagram, and Reddit.