Pika Protocol
  • Documentation
  • Overview
  • Features
  • Crypto, Forex and Commodity Trading
  • User Guide
    • Trading
    • Liquidity
    • Handling Abnormal Scenarios
    • Trading via Etherscan
    • Trading Pairs
  • PIKA Token
  • Reward Program
  • Contracts
  • Audit
  • Archived
    • Pika Protocol V3
    • Pika Protocol V2
    • Pika Protocol V1
      • Overview
      • Pika Exchange
        • Funding
        • Liquidation
        • Dynamic Liquidity Adjustment
        • Parameters
      • PIKA Stablecoin
        • How it Works
        • Compare with other Stablecoins
        • Pika Share
      • Participate in Pika Protocol
      • Risks
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  1. Archived
  2. Pika Protocol V1

PIKA Stablecoin

One of the easiest ways to transform any token into dollar exposure is perpetual swap contracts. For example, Bitmex offers a BTC/USD contract that is margined in BTC. This contract is structured like non-linear inverse future contracts, meaning the contract value is measured in one currency, USD, but the position is margined and settled in a different currency, BTC. If a user opens a 1x short position, this gives the user a dollar exposure with the ability to earn yields from funding payments. This way of hedging is in fact widely adopted by traders to get exposed to dollar exposure.

PIKA achieves its stability in a similar way. To mint a PIKA, a user can simply open a 1 dollar value of short position in any supported token swap markets(e.g., ETH or WBTC).

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Last updated 2 years ago