> For the complete documentation index, see [llms.txt](https://docs.pikaprotocol.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.pikaprotocol.com/archived/pika-protocol-v1/master.md).

# Overview

![](/files/-MY2LSd6ErlURFM-LoEx)

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.