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Pika protocol- Options Trading with an USDC vault on Optimism (Potential Airdrop)

Updated: Jun 15, 2022

Pika Protocol is an options trading platform on Optimism. Optimism is layer 2 blockchain. Pika could potentially launch a coin and airdrop early users. Optimism recently gave a generous airdrop to early adopters. I will share how to use the Pika Protocol. Disclaimer: Options trading is highly risky.

Step 1 – Bridge funds onto Optimism or send $OP from the exchange

Firstly you’ll have to get funds onto Optimism. I’m assuming that you have a Metamask or another wallet. If you don’t have a browser wallet or know what it is, you probably shouldn’t be options trading.

You use a bridge like Connext to bridge ETH onto Optimism. I like the Connext Bridge, which I find usually has the cheapest fees. There are rumors that Connext Bridge may do an airdrop as well. You need ETH to pay for gas fees on Optimism.

You can also buy OP on an exchange and send it to your wallet but remember you need ETH in your wallet to use Optimism. Make sure to select Optimism as the chain on the Exchange of your choice and double-check the wallet. I would recommend sending a bit first if you are sending a large amount. You can also send ETH from an exchange to your wallet. Just select Optimism as the Network.

Check different exchanges and find the one with the cheapest fees. Here are a few exchanges that you can use: Binance, Kucoin, Mexc, Whitebit, Coinbase, BitMart and BitFinex.

Step 2 – Use Uniswap to get USDC

Use Uniswap to get USDC, which Pika Protocol uses. The gas fees on Optimism are cheap but you should keep some ETH in your account to pay for gas fees when using the protocol. I have seen gas fees go up to $1.5 etc at times.

Step 3 – Deposit USDC into the Vault

Click on the Vault tab. Enter how much USDC you want to deposit and click on Stake. Approve the transaction. The vault is the safest option on Pika. Every time traders lose money, vault depositors profit. However, money can be lost if options traders are making money. It is a bit risky but usually, options traders lose.

Step 4 – Options Trading

Click on the trade tab. You will be able to choose from a few different cryptos from the drop-down menu.

Select if you want to long (bullish) or short (bearish).

In the USDC section, input how much you want to risk. There is a minimum of $50.

You can change the leverage and by moving the cursor from left to right.

You will see your liquidation price and other details below. Click submit and approve transaction.

Profit over 4.5% can only be taken four hours after you open the position. This is to prevent botting.

You choose how much of the position you want to close. You can add to the position and lower leverage if you are close to getting liquidated.

Step 5 – Options strategies

I would not recommend playing with options unless you have some kind of strategy in mind. If you base your decision on feelings and momentary swings, you can easily pick the wrong direction and get liquidated. I’m speaking from experience.

If you are bearish on the market due to certain economic factors, open a position with low leverage and take profits or close portions of your position as the market moves in the direction you want. This strategy can be employed in the other way if you are bullish.

Only play with what you afford to lose since if the market moves in the completely wrong direction and the crypto you have shorted or longed moves past the liquidation price, you will get liquidated and lose everything. This goes back to one of the most important rules in investing; don’t put all your eggs in one basket.

Step 6 – Airdrop strategy

If you are only using Pika for a potential airdrop, I would leave some USDC in the vault. I would make a few trades and close positions. There is no guarantee of an airdrop and the parameters for eligibility are not clear. I would recommend playing with at least $100 on Pika.

In conclusion, options trading is extremely risky and should be approached with caution. Pika Protocol is a good option for options trading on Optimism and is a potential airdrop candidate.

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