Important Update for PIKA Token

We’ve taken the community’s feedback, and after extensive consideration, have reached the difficult conclusion to retire the PIKA token. Holders can redeem their tokens for ETH, effectively dissolving the PIKA token. Moving forward, our focus will be on maintaining and enhancing the platform without a native token.

Key Actions

• Utilizing all funds to facilitate PIKA for ETH redemption.
• Retiring the PIKA token.
• Continuing operations and development of The Pika Protocol without a token-based system.

Redemption Details

Token holders are entitled to redeem their PIKA at a fixed exchange rate of approximately 0.0001632 ETH per PIKA (equivalent to ~$0.34). To enable this process we have deployed all 3,538 ETH to Uniswap v3, confined to a single tick range. PIKA redemption is guaranteed for the next six months. Following the redemption period any residual liquidity will be redirected towards protocol development.

The rate was determined factoring for total circulating supply (including potential esPIKA redemptions) and the initial 4,696 ETH (plus earnings from stETH), while accounting for 6 months costs incurred: 860 ETH was deployed for protocol owned liquidity (with roughly 110 ETH remaining), 200 ETH for the discord incident settlement, and 230 ETH for operational expenses. Operational expenses included infra costs, user refunds/reimbursements, bounties, salaries, order execution gas subsidy, and other.

Background

Pika Protocol launched in 2021, focusing on an OP native platform for decentralized leverage trading. Since inception, we’ve launched four major updates and achieved roughly $2 billion in trading volume. Following our May 2023 PIKA TGE, where we raised 4,696 ETH, we sought to establish PIKA as a utility token to incentivize protocol alignment.

In the six months following our TGE, Pika Protocol has achieved many milestones:

• We successfully launched Pika v4, which now supports close to 50 trading pairs.
• We introduced PIKA staking, providing another avenue for our community to participate in the protocol.
• We completed a retroactive airdrop to early PIKA supporters, rewarding their early faith in our project.
• We kickstarted the PIKA incentives program to further engage our user base.
• We unveiled the Pika trading leaderboard, fostering a competitive spirit among traders.
• We entirely revamped the pikaprotocol.com app, enhancing user experience and functionality.
• We implemented trading discounts and delegation features, offering more value to PIKA holders.
• We added the capability for trading position sharing.
• We introduced a Trading SDK, empowering developers to build on our platform.
• Our community has been instrumental in developing a range of ecosystem tools, reflecting the strength and innovation of the Pika Protocol community.

Despite our development efforts and community-building activities, the PIKA token’s impact on growth has been negligible. The concerns and requests from the community led us to conclude that the token may not be effective at incentivizing growth nor aligning holders’ interests and the retirement of the token is the best path forward.

Product Continuity

There will be no changes to the trading platform and the USDC vault will continue to operate as normal.

Changes in EsPIKA Staking

• EsPIKA staking can be converted to PIKA based on the current vesting status.
• Unstaked esPIKA will be honored for 10% PIKA. A new interface will launch in approximately one week to facilitate this process for esPIKA holders.

Changes in PIKA Staking and Incentives

All PIKA stakers are advised to unstake and exchange PIKA for ETH

• esPIKA emissions and USDC trading fee rewards for PIKA stakers end today.
• esPIKA incentives for traders end today.The pro-rated epoch 4 rewards will be processed as soon as possible.
• esPIKA rewards for USDC vault liquidity providers will conclude at the end of epoch 4.

Trading Discount Adjustments

The existing trading fee discount mechanism will persist, we will make adjustments to it in future to remove the requirement of PIKA staking.

Looking Ahead

We will continue to advance Pika Protocol’s mission without a native token, leaning on our two-year track record of pre-token success.

We acknowledge this marks a significant setback and a change in our trajectory and wish to express our gratitude to everyone who has supported and contributed to Pika Protocol. Your dedication has been instrumental in shaping a protocol that stands to make a lasting impact.