The derivatives market is the largest market in the world that has multiple trillions of dollars in circulation. In the crypto world, the derivatives market is still a new field and there are only a few projects which target this market.
In 2021, the Solana ecosystem has been emerging with the DeFi summer and the NFT/Gaming/Metaverse trend. Every component of the ecosystem is completed and gains the very initial success. Drift Protocol is the trading platform focusing on the derivatives market, competing with other similar projects on Solana and other blockchain platforms.
The article below will provide all detailed information about Drift Protocol, including:
- What is Drift Protocol? How does it work?
- What is Drift Protocol Token? All detailed information about its Tokenomics.
- How to get and buy Drift Protocol tokens?
- Roadmap and updates.
- Details about the team, investors, and partners.
- Is Drift Protocol a good investment?
Let's explore the potential of Drift Protocol and why it was able to give such a big airdrop!
What is Drift Protocol?
Drift Protocol is a perpetual futures trading platform built on Solana that allows users to execute cross-margined trades. The platform offers up to 5x leverage on crypto assets as collateral.
Drift has the following notable features:
- Fast: Drift Protocol is powered by the Solana blockchain.
- Full cross-margin support: Multiple opened positions are only in one single pool of collateral.
- Permissionless: Users can create a liquidator bot and host a User Interface.
- Transparent: The trading platform is transparent and does no detrimental activity to its users.
The Alpha Mainnet of Drift Protocol was released in late October 2021. Users need to own the NFT representing the Drift Alpha Ticket to have access to the alpha version. There are various ways to acquire this NFT as follows:
- Airdrops on Discord and Twitter.
- Devnet Beta Testers.
- Twitter Campaign or community rewards.
We're lucky to own one Drift Alpha Ticket to have a chance to experience the Alpha Mainnet of Drift Protocol. We can deposit our funds to trade the SOL-PERP pair. In our trial, the UI works smoothly and there was no bug after we placed some trades.
However, since it's in the early stage, it's still missing a few trading functionalities such as Limit Order, Take Profit/Stop Loss, other perpetual pairs, etc. We can contribute additional ideas to the trading platform via Share Feedback to improve the user experience.
How does Drift Protocol work?
Drift Protocol is a trading platform that is based on the following main components:
- Global Collateral Vault is the place escrowing all deposits from users.
- DAMM (Dynamic AMM) is based on vAMM (virtual AMM), providing the price for Perpetual Future mark prices.
- Markets record the market state and contain a reference to vAMM and Oracle.
- Insurance Fund comes from trading and liquidation fees to guarantee users’ benefit.
The platform includes an overall admin and 3 types of users as follows:
- Admin is responsible for starting the insurance fund, new markets, changing market parameters. The Admin control will be granted via a DAO.
- Traders conduct trades on the platform.
- Arbitrageurs collect spreads between exchanges.
- Liquidators decide to run liquidations on the platform and get rewards in return.
At present, the max leverage of Drift Protocol is up to 5x. The platform accepts SPL-USDC crypto assets as collateral. Furthermore, multiple positions are cross-margined in one single collateral pool. The trading fee is charged with 0.1% of the total trading volume which is taken from the user’s collateral account.
What is Drift Protocol Token?
Detailed information about Drift Protocol Token
Drift Protocol Price Today
Drift Protocol Key Metrics
- Token Name: Drift Protocol Token.
- Ticker: Drift Protocol.
- Blockchain: Solana.
- Token Standard: SPL.
- Contract: Updating...
- Token Type: Updating...
- Max Supply: Updating...
- Circulating Supply: Updating...
Drift Protocol Token Allocation
Drift Protocol Token Sale
Drift Protocol Token Release Schedule
Drift Protocol Token Use Case
Roadmap & Updates
- Release the Litepaper.
- Drift Protocol received a Grant from Solana and Serum.
- Start Seed Fundraise.
- Closed Devnet Launch.
- Devnet Launch.
- Closed Alpha Mainnet Launch.
- Full Alpha Mainnet Launch.
- Trail of Bits Audit Scheduled.
- Stop Losses and Take Profits.
Team, Investors, and Partners
Drift Labs raised $3.8M in the seed round led by Multicoin Capital with other partners Alameda Research, Jump Capital, LedgerPrime, Not3Lau Capital (Darren & Daryl Lau), QCP Capital, Robot Ventures (Tarun Chitra and Robert Leshner), and ROK Capital.
Is Drift Protocol a good investment?
As dYdX is the leading derivatives trading platform in the crypto world, it is a role model for other trading platforms such as Drift Protocol. The Drift platform can leverage the foundation of the Solana blockchain to accelerate development.
Currently, Drift Platform is still in its early state so it releases only a little information. However, there are some key highlights from Coin98 for investment decisions.
Drift Protocol is built on the Solana blockchain. Therefore, it can have comparatively laser-speed transactions with fairly low fees on the platform. This allows traders to seamlessly execute as many transactions as they want. Overall, the derivatives markets built on top of the blockchain will have a high potential to outperform other traditional platforms.
Currently, in the Alpha Mainnet, Drift Protocol can only support up to 5x leverage which is relatively lower than other similar platforms such as Mango Markets and dYdX (10x leverage). As we read in the feedback that the maximum leverage will be increased.
In terms of the technology of the trading platform, Drift Protocol has carefully considered the necessary components to provide basic and advanced features of a derivatives platform. With blockchain technology, traders can connect non-custodial wallets to interact with the platform.
Being backed by many large Venture Capitals with sufficient funds. Furthermore, their strong network effect in the Solana ecosystem will surely leverage the Drift trading platform with numerous token pair support.
Drift Protocol also supports developers to build liquidators and trading bots on the platform via the Drift SDK. Besides traders, developers can participate in the trading platform to increase the trading volume and ensure the functionality of liquidation.
And as usual, whether it is worth investing or not, Do Your Own Research before buying and be responsible for your investment.
Drift Protocol is not the only derivatives trading platform in the crypto world. There are other similar projects on various blockchain platforms such as:
- Solana: 01 Protocol, Mango Markets, etc.
- Ethereum: Perpetual Protocol, dYdX, Injective Protocol, etc.
- Cardano: Ardana, MatrixSwap, etc.
- Multi-chain: Synthetic, etc.
Drift Protocol is focusing on developing the platform to release the final mainnet as soon as possible. It can be expected to raise a storm in the crypto derivatives market.
That is all you need to know about Drift Protocol. I hope you’ve gained helpful insights to understand the potential behind Drift Protocol. If you want to know further about Drift Protocol, please feel free to leave a comment below.