At a recent event, Cindy Leow and David Lu, who started Drift Protocol in 2021, talked about how impressively the platform has grown. Drift Protocol is a big Perpetual DEX on the Solana blockchain. It aims to make a decentralized exchange that’s just as good as centralized exchanges.
Drift is a decentralized trading protocol built on the Solana blockchain, offering features such as on-chain trading with leverage, borrowing and lending, and yield generation. The protocol provides traders with up to 10x leverage opportunities through perpetual swaps and allows users to borrow and lend blockchain-based assets to earn rewards.
It also offers an SDK for developers to build bots or access historical data, along with built-in trading bots to assist traders. The project has gained attention for its significant Total Value Locked (TVL), surpassing $20 million
What is Perpetual Futures?
Cindy shared valuable insights on Perpetual Futures and synthetic contracts designed specifically for crypto-native assets. These instruments allow traders to make leveraged bets on market directions.
Unlike regular Futures, Perpetual Futures on Drift do not expire, making the trading process much simpler.
The Perpetual Futures market has become a force to be reckoned with, boasting a daily volume of over 100 billion, surpassing spot trading by tenfold.
Furthermore, Cindy highlighted the importance of DeFi Perpetuals, presenting them as a superior product that aligns with the ethos of cryptocurrency.
She also pointed out the limitations of centralized exchanges, such as lack of transparency, regional restrictions, and vulnerability to single points of failure.
The success of Drift protocol
She highlighted the achievements of Drift Protocol, which launched its V2 version in 2021 with a primary focus on replicating the liquidity and user experience of centralized exchanges.
Since then, the protocol has accomplished significant milestones, including trading over $11 billion in volume, locking in a total value of $25 million, and attracting over 10,000 users.
Drift Protocol has also made an impressive mark on the Solana market, capturing an astounding 95% market share in Solana’s Perpetual trading space. This highlights the protocol’s rapid growth and widespread adoption.
Cindy further emphasized the remarkable 200% week-over-week growth and an 80% increase in daily active users over the past quarter. She projected that Drift Protocol is on track to become the leading Perpetual Dex in the broader crypto landscape.
Principles behind Drift protocol
David also illuminated the principles and strategies that propelled the platform to become the largest Perpetual Decentralized Exchange (Dex) on the Solana blockchain.
He emphasized the need for rapid experimentation in Web3, especially within the DeFi space, where achieving product-market fit is a dynamic challenge. This necessitates quick testing of concepts that have the potential to either excel or fail. David provided two compelling examples of experiments conducted by Drift.
One success story he shared was Super Stake Sol, a product that emerged from the desire to experiment with a lighter, more refreshing user interface. It was launched in just three weeks and achieved remarkable results, with 100,000 Sols staked within eight hours.
Notably, 60% of these users had never interacted with the Drift contract before, revealing untapped market segments in search of different yield sources.
The co-founder then introduced “Drift Draw,” a recent addition designed to incentivize traders and boost trading volumes. This program redirects fees into a growing pool, rewarding traders with tickets for every dollar traded.
This innovative mechanism resulted in a remarkable 300% increase in trading volume and attracted a thousand new users within a short period. It demonstrates the crypto audience’s interest in engaging gambling-centric features.
Additionally, it was revealed that Drift Protocol successfully raised $23.5 million in a Series A funding round, bringing the total funding to $27.3 million. The round was led by Polychain Capital, with support from Anatol and Raj from Solana. With this substantial funding, Drift aims to scale beyond DeFi and compete at the level of centralized exchanges.
Overcoming UX barriers
In addressing the complexities of onboarding users to DeFi platforms, Cindy emphasized the importance of streamlining the process by eliminating unnecessary steps. One such step is the requirement for users to download a wallet and transfer funds from centralized exchanges.
Drift’s approach, known as “bring the product to the user, not the other way around,” has successfully enhanced the user experience.
Cindy highlighted the fruitful collaboration with MetaMask Snaps, which enabled Drift to extend its vision and speed to non-Solana users. By allowing MetaMask’s vast user base of 30 million to directly connect to Drift without needing a separate wallet, the platform experienced an immediate influx of traders entering the Solana ecosystem.
Another notable development is Drift’s partnership with Circle, leveraging its cross-chain transfer protocol. This innovative solution enables seamless migration of USDC between different chains, eliminating the need for centralized exchanges or decentralized bridges.
As a result, bridging time is significantly reduced, providing users with a more streamlined and hassle-free experience.
Drift mobile experience
Acknowledging the increasing popularity of mobile trading, she highlighted Drift’s commitment to delivering a top-notch user interface for mobile users. The platform aims to provide an exceptional trading experience for users on the move.
The beta launch of mobile trading in collaboration with Saga has yielded impressive results, with over 35% of user sessions originating from mobile devices and a remarkable 250% increase in quarterly mobile sessions.
Cindy concluded by expressing Drift’s dedication to continuously enhancing the user experience (UX) and expanding access to DeFi. The platform’s ongoing experiments and collaborations demonstrate its commitment to not only addressing current challenges but also anticipating and adapting to the evolving needs of crypto traders.
Furthermore, David emphasized the importance of achieving centralized speed and product parity. He discussed features such as Auto-Confirm and institutional-grade multi-signature wallets that enhance both user experience and security.
To wrap up the presentation, the co-founders addressed the community’s anticipation of a native token. While they acknowledged the token’s significance in the protocol’s growth and decentralization, they underscored the need for careful planning and community involvement.
