Drift (DRIFT) protocol overview

According to the April 2025 DeFi Llama monitoring service, there are more than 1,600 DEX protocols in the DeFi market, 40% of which are in the Solana ecosystem. Drift Protocol is a major player in this ecosystem, and this article will discuss it.

What is Drift?

Drift Protocol is one of the first decentralized exchanges in the Solana ecosystem to trade perpetual cryptocurrency futures, specifically SPL tokens. The decentralized exchange was launched in 2021 during the second major crypto rally, but the team released its token only three years later.

The Drift Protocol development team was founded in 2016 and initially planned to develop a decentralized exchange for the Ethereum ecosystem. However, the project team eventually targeted the Solana ecosystem due to its faster and cheaper transactions and ease of development.

According to DeFi Llama, Drift Protocol ranks second only to Raydium among all decentralized exchanges in the Solana ecosystem regarding total blockchain value (TVL), which is $858.6 million as of April 2025.

Although Drift Protocol primarily focuses on trading in open-ended cryptocurrency contracts, this decentralized exchange also supports the exchange of digital assets on the spot market via blockchain (atomic swaps).

In addition to futures trading, Drift Protocol supports Prediction markets, allowing users to bet on future events on the Solana blockchain and earn revenue in case of a positive outcome.

How does Drift Protocol work?

The mechanism of Drift Protocol is based on the decentralized automated market maker (DAMM) model. Instead of classic orders for buying and selling cryptocurrency, liquidity pools are used, where each user can add his assets and receive income from trading transactions.

Many well-known decentralized exchanges operate similarly, such as Uniswap, PancakeSwap, and Balancer. By the principle of operation, DAMM resembles the virtual automated market maker model (vAMM) but uses new mechanisms for redistributing liquidity pools that adjust to the demand of traders and investors.

Drift Protocol's DAMM mechanism is designed to allow traders to trade with up to 101x leverage directly on the Solana blockchain using a cryptocurrency wallet. Like many decentralized exchanges, Drift Protocol does not require cryptocurrency deposits, which means investors and traders are protected from exchange hacks.

Drift Protocol supports trading of perpetual contracts for many different cryptocurrencies, including wrapped tokens issued on the Solana network:

Drift Protocol supports, among other things, so-called "supers taking," allowing SOL cryptocurrency holders to steal cryptocurrency with leverage to generate passive income.

Users can also deposit in over 20 different cryptocurrencies to use as collateral in futures trading and earn income through interest rates on perpetual contracts.

Drift protocol token

The Drift Protocol native token with the ticker DRIFT was issued on the Solana blockchain and listed on exchanges only in May 2024. It was distributed in a free giveaway (airdrop) to active members of the project's community. Initially, 120 million DRIFT tokens were distributed, which amounted to 12% of the total supply.

According to the April 2025 CoinMarketCap monitoring service, the total number of tokens is 1 billion DRIFT tokens, of which more than 294 million are already circulating on the market (i.e., 29.4% of all existing tokens).

The DRIFT token is endowed with utilitarian functions and used for decentralized management of the Drift Protocol ecosystem. Token holders can vote for proposals to improve the Drift Protocol and earn revenue from DRIFT steaking. In addition, DRIFT tokens can be used as collateral for leveraged trading on a decentralized exchange.

DRIFT token holders can also create liquidity and add the altcoin to pools, enabling traders to exchange crypto assets on the decentralized Drift Protocol exchange.

As of April 2025, the DRIFT token is valued at $0.51, but this is 21% lower relative to the asset's value at the time of listing in May 2024. The DRIFT token's historical price high (ATH) was $2.65 in November 2024. Relative to its ATH, the DRIFT cryptocurrency exchange rate is more than 80% lower — this drop occurred against the backdrop of a general correction in the cryptocurrency market.