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REGULATION
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1 month ago

Drift Protocol, perpetual futures exchange on Solana, surpasses $1 billion milestone in TVL

2025-01-09

REGULATION
by
1 month ago


Drift Protocol is a decentralized exchange (DEX) built on the Solana blockchain, specializing in perpetual futures trading.

 

Launched in 2021, it has quickly become one of the largest open-sourced perpetual futures exchanges, facilitating transparent and non-custodial trading of cryptocurrencies while leveraging the high-speed capabilities of Solana.

 

Drift has surpassed $1 billion in total value locked (TVL) on Jan 6, 2025. Furthermore, Drift announced on Jan 6 that users can now use BONK as collateral on the platform.

 

On September 19, 2024, Drift Protocol announced a $25 million Series B funding round led by Multicoin Capital, with participation from Blockchain Capital, Primitive Ventures, and Folius Ventures. This brings Drift's total funding to $52.5 million.

 

The funds will be used to develop a comprehensive DeFi SuperApp on the Solana blockchain, offering a range of financial services including spot trading, derivatives trading, and prediction markets.

 

Drift aims to become the "Robinhood of crypto" by providing a capital-efficient, cross-margined platform for various trading activities.

 

Key Features of Drift Protocol

  • Perpetual Futures Trading: Users can trade perpetual swaps with leverage up to 50x, allowing for significant potential gains or losses. This feature positions Drift as a competitive player in the derivatives market.

 

  • Low Fees and Slippage: Drift aims to provide low transaction fees and minimal price impact on trades, addressing common issues faced by traditional on-chain exchanges.

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  • Cross-Margining: The protocol employs a robust cross-margined risk engine that enhances capital efficiency while protecting traders from overextending their risks. This system allows various functionalities like borrowing and lending against collateral deposited in the protocol.

 

  • Liquidity Mechanisms: Drift utilizes multiple liquidity strategies including Just-in-Time (JIT) auction liquidity, limit order book liquidity, and automated market maker (AMM) liquidity to ensure efficient order fulfillment and competitive pricing.

 

 

Additional Offerings

In addition to perpetual futures, Drift Protocol has expanded its offerings to include:

  • Spot Trading with Margin: This allows users to trade assets with immediate settlement while leveraging their positions.
  • Borrow and Lend Markets: Users can deposit assets to earn yields or borrow at variable rates.
  • Prediction Markets: Known as BET, this feature allows users to predict outcomes of real-world events, adding a unique dimension to the platform's functionality.

 

Governance and Tokenomics

The native governance token of Drift Protocol is DRIFT, which plays a crucial role in the ecosystem. DRIFT holders can participate in the Drift DAO (Decentralized Autonomous Organization), voting on key decisions related to protocol upgrades and development initiatives.


Additionally, staking DRIFT tokens allows users to earn rewards from protocol-generated fees.

 

Overall, Drift Protocol represents a significant advancement in decentralized finance (DeFi) by combining innovative trading products with a user-friendly interface on the Solana blockchain, catering to both novice and experienced traders alike.

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