Solana-Based Perpetual Swaps DEX Drift Protocol Raises $3.8M

Multicoin Capital led the decentralized exchange’s funding round with Jump and Alameda also participating.

AccessTimeIconOct 26, 2021 at 2:00 p.m. UTC
Updated May 11, 2023 at 7:07 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Venture cash keeps pumping into Solana-based decentralized finance (DeFi), as crypto derivatives exchange Drift Protocol is the latest to benefit with a $3.8 million seed round of funding.

Multicoin Capital led the token sale with crypto trading firms Jump Capital and Alameda Research joining the round, among others. Their participation highlights market makers’ appetite for exposure to Solana’s still-nascent decentralized exchange (DEX) scene.

  • How NEAR Enables Multichain Access From One Account
    00:56
    How NEAR Enables Multichain Access From One Account
  • Why Injective's INJ Has Surged 3,000% in 2023
    00:52
    Why Injective's INJ Has Surged 3,000% in 2023
  • DeFi Market Rebounds to $50B as Speculators Hunt for Yield
    01:11
    DeFi Market Rebounds to $50B as Speculators Hunt for Yield
  • How Spool Is Aiming to Help Institutions Enter DeFi
    11:05
    How Spool Is Aiming to Help Institutions Enter DeFi
  • Drift focuses on perpetual swaps, or futures contracts without an expiry. Across all of crypto, that market saw $170 billion in trading volume over the last 24 hours, according to CoinGecko, with the lion’s share riding atop the Ethereum blockchain.

    Solana’s $7 billion swaps landscape is much less developed as only a handful of exchanges are participating, and even fewer DEXs. Mango Markets, dYdX and now Drift are competing for traders’ dollars.

    Solana DEXs

    Cindy Leow, a co-founder of Drift, said her DEX uses a “dynamic automated market maker” to keep the needs of Drift’s liquidity pool in line with market demands. She claimed Drift is more capital-efficient than the automated market makers (AMMs) prevalent on many chains.

    In practice, that means the market mechanisms that worked when bitcoin (BTC) was trading at $10,000 may no longer be suitable.

    “Who’s going to pay 3% for a 1 BTC trade? That’s ridiculous,” she said. “We have a mechanism that essentially repegs the core of the virtual AMM – where you have the most liquidity, the lowest slippage – back to the current oracle price.”

    Drift is set to launch this month with support for SOL, BTC, ETH and Solana ecosystem tokens.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Danny Nelson

    Danny is CoinDesk's Managing Editor for Data & Tokens. He owns BTC, ETH and SOL.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


    Read more about