About

Drift Protocol is a decentralized exchange for perpetual futures built on Solana, featuring cross-margined trading accounts and a virtual automated market maker (vAMM) for price discovery. It operates on a permissionless blockchain, allowing users to trade with collateral in various digital assets without intermediaries. Drift provides risk management tools, including stop-loss and take-profit orders, within its trading interface.

History

Drift V1

Drift was announced in August 2021 and founded by Cindy Leow and David Lu. In September 2021, Drift launched on public devnet. In October 2021, Drift launched a non-fungible token (NFT) gated protocol on mainnet, before opening it to the public in December 2021 and allowing users to trade perpetual futures. During Drift V1, the following significant protocol developments occurred:

• In February 2022, Drift launched limit orders, allowing users to specify the price at which they would like a trade to execute.
• In May 2022, Drift launched maker orders, allowing users to provide liquidity to Drift.
• In May 2022, Terra’s synthetic dollar (UST) de-pegged in a death spiral, inducing instability across the crypto space. This included Drift, which saw rapid withdrawals and an exploit that resulted in Drift’s remaining Insurance Fund (~$4.95 million) being depleted, resulting in a remaining shortfall of ~$14.55 million. Drift paused the protocol indefinitely while securing $14.55 million in emergency financing from undisclosed investors so it could make users whole via a settlement plan. The protocol remained offline until Drift V2.

Drift V2

In October 2022, Drift launched Drift V2 on public devnet. In November 2022, Drift launched a non-fungible token (NFT) gated protocol on mainnet, before opening it to the public in December 2022. V2 introduced a hybrid liquidity mechanism comprising (i) Just-In-Time (JIT) liquidity, (ii) Orderbook, and (iii) Hybrid AMM. Additionally, V2 introduced three new features: (i) spot trading, (ii) borrowing and lending, and (iii) passive liquidity provisioning and insurance fund staking. Lastly, V2 introduced a variety of security parameter enhancements. During Drift V2, the following significant protocol developments occurred:

• In February 2023, Drift launched leveraged spot markets.
• In April 2023, Drift launched Insurance Fund Staking, allowing users to stake funds, putting them at risk to earn a portion of protocol fees.
• In January 2024, Drift launched the Drift Points Program. Drift Points comprised Trader Points (usage post-Drift Point announcement) and OG Points (usage pre-Drift Point announcement).
• In February 2024, Drift launched dSOL, a liquid-staked version of SOL.
• In March 2024, Drift introduced pre-launch markets, allowing users to trade upcoming tokens pre-token genesis with up to 3x leverage.
• On April 16, 2024, Drift introduced the DRIFT token. On April 18, 2024, Drift ended the Drift Points Program and launched the Drift Trader Program which provides Trader Points to users that trade on Drift.
• On May 16, 2024, the DRIFT token went live, with eligible users able to claim a portion of the 120.00 million DRIFT (12.00% of the maximum token supply) allocated to the airdrop. These tokens were distributed amongst approximately 150,000 addresses that comprised (i) OG Points holders, (ii) Trader Points holders, (iii) Drift V1 users, and (iv) Drift keepers.