Liquidity providers deposit funds into Pika Protocol and receive trading fees from traders (supply-side fees).

Pika Protocol is a non-custodial exchange for perpetual contracts built on Optimism. Pika Protocol was founded by an anonymous team and was launched in 2021.

PIKA tokenholders own and govern the protocol. Pika Protocol has no private investors.

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Pika Protocol

# Pika Protocol Expenses Methodology

## 1. Overview

PikaProtocol expenses represents the daily USD value of OP token rewards distributed by PikaProtocol to incentivize perpetual trading activity on Optimism. This metric captures the protocol's cost of user acquisition and retention through token-based incentives. The calculation aggregates daily `RewardPaid` events from PikaProtocol's VaultTokenReward contract, converts OP token amounts to USD, and presents them as operational expenses.

## 2. Data sources

- **Blockchain events**: Parsed `RewardPaid` events from PikaProtocol's VaultTokenReward contract on Optimism blockchain, containing reward distributions to trader addresses
- **External data**: End-of-day price feeds for OP token USD conversion and token metadata for decimal precision handling
- **Transaction context**: Optimism transaction records containing the reward distribution events with timestamps and amounts

## 3. Step-by-step calculation

### Component A: Token incentive extraction
- **Purpose**: Captures all OP token rewards paid by PikaProtocol to traders
- **Logic**: Extracts `RewardPaid` events from the VaultTokenReward contract on Optimism. Each event contains the recipient address and reward amount in raw OP token units. Events are filtered to the specific PikaProtocol VaultTokenReward contract address and classified as perpetual trading incentives in the derivatives market sector. The OP token contract address `0x4200000000000000000000000000000000000042` is used for price lookups.
- **Key fields**: `block_timestamp` for timing, `address` for recipient trader, `reward` amount in raw OP token units, transaction hash and log index for uniqueness

### Component B: Daily aggregation and USD conversion  
- **Purpose**: Converts raw token incentives to daily USD amounts
- **Logic**: Groups reward events by day using timestamp truncation to daily boundaries. Raw OP token amounts are converted to USD using end-of-day OP token price feeds. Token amounts are corrected for OP token's 18-decimal precision to get actual token quantities before price conversion. All events are tagged with chain as Optimism, business line as perpetual trading, and market sector as derivatives.
- **Key fields**: Daily `timestamp`, `chain_id` as Optimism, `token_incentives` in USD after decimal correction and price conversion

### Component C: Metric finalization
- **Purpose**: Standardizes the metric format and handles data quality
- **Logic**: Applies the finalization process which validates data consistency, ensures proper schema formatting, and fills any missing dates with zero values to maintain continuous daily time series. The `token_incentives` field is renamed to `expenses` to reflect that these OP token rewards represent an operational cost for PikaProtocol.
- **Key fields**: `expenses` (renamed from `token_incentives`), standardized timestamp and chain fields

### Final aggregation
- **Combining components**: The metric flows linearly from raw events to facts to aggregated incentives to final expenses without complex joins
- **Currency conversion**: OP token amounts are converted to USD using end-of-day price feeds after correcting for 18-decimal precision
- **Time aggregation**: Events are aggregated to daily boundaries using timestamp truncation, with missing dates filled with zeros
- **Final calculation**: Daily expenses equal the sum of all OP token rewards paid to traders on that day, converted to USD value. This represents PikaProtocol's daily cost of incentivizing trading activity through token distributions.

*This methodology was automatically generated by Token Terminal's methodology analyzer.*

Total project operating and incentive expenses.

Pika ProtocolPIKA

Expenses

Expenses

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