What is Drift Protocol (DRIFT)? Project and Token Analysis

Coin: Drift
Ticker: DRIFT
Date Deployed: Wed May 15, 2024

Origin of the Project

Drift Protocol was launched in 2021 by Cindy Leow as an open-source decentralized exchange (DEX), offering users non-custodial trading options. Built on the Solana blockchain, Drift Protocol allows users to borrow, lend, stake, and swap cryptocurrencies seamlessly. In October 2021, the platform secured $3.8 million in seed funding, led by Multicoin Capital, a prominent crypto-focused investment firm, to support the development of the DEX.

Currently running its version 2 (v2), Drift Protocol has enhanced its trading experience by improving liquidity, market making, and collateralization. Specializing in perpetual futures, the platform features cross-margined trading accounts and a virtual automated market maker (vAMM) for efficient price discovery. Operating on a permissionless blockchain, Drift enables users to trade with collateral in various digital assets without intermediaries, offering advanced risk management tools such as stop-loss and take-profit orders to enhance user control and flexibility.

Products

Trading Options:

Perpetual Futures Contracts: Enables trading of perpetual contracts with no expiration, allowing for leveraged and speculative trading.
Spot Trading: Facilitates direct purchase of underlying assets.
Swaps: Allows asset exchanges without holding the underlying assets.

Earning Opportunities:

Lending and Borrowing: Users can lend or borrow assets to earn interest or leverage their trades.
Insurance Fund Staking: Stake assets in the insurance fund to earn rewards.
Market Maker Rewards: Market makers can earn rewards for providing liquidity to the platform.

Governance and Token:

DRIFT Token: The governance token of Drift, giving holders voting rights within the DAO to propose or vote on protocol changes.

Should DRIFT Be in Your Portfolio?

Before you decide whether or not to add DRIFT to your portfolio, click here to scan the contract on Solsniffer. Solsniffer is the number one blockchain intelligence tool to detect security risks on Solana. Security risk analysis on Solana has never been easier, make sure to be aware of potential DeFi wallet scams and other crypto security concerns before investing.

Due Diligence Tips Before Investing or Trading DRIFT

Research the Token

Analyzing DRIFT as a token is important for understanding its potential. Review its whitepaper, community engagement, development team, and long-term roadmap. Is the project solving a real problem and has a clear plan for the token in its ecosystem?

Perform in-depth research before trading any Solana-related project, including DRIFT. Understanding the project’s whitepaper, the use case, and the founding team’s goals will give you insight into the coin’s potential.

The orderbook can leave clues too, when there are more buy orders than sell orders, DRIFT’s price is likely to rise, while an excess of sell orders could lead to a price drop. It can also help identify past market manipulation.

Develop a Safe Trading Strategy

Having a structured trading strategy prevents making emotional mistakes. If you cover multiple aspects, such as considering market conditions, clear trading goals, and determining entry and exit points, it can improve your chances of success. Your risk tolerance can make a great plan if you follow it and if the market agrees with your strategy.

In crypto, it’s easy to get caught up in the excitement and make impulsive decisions, especially when seeing how many others are making loads of profits. Avoid rushing into buying DRIFT during a price pump, as a correction can follow.

An effective risk management strategy is a great differentiator as a trader, and that includes DRIFT. Use stop-loss and take-profit orders to limit losses and lock in profits automatically. Also, position-sizing is smart to not risk too much of your capital on a single trade, protecting your portfolio from significant losses.

How to Scan DRIFT on Solsniffer

Copy the DRIFT contract address: DriFtupJYLTosbwoN8koMbEYSx54aFAVLddWsbksjwg7
Open the Solsniffer website and paste the address in the search bar.
Within seconds, a detailed analysis of DRIFT on-chain data is generated.
A security score called Snifscore also ranks the project out of 100 to determine the authenticity of the project.

DRIFT Tokenomics

Total Supply: 1,000,000,000
Max Supply:1,000,000,000
Market cap: $135,263,638

Snifscore Analysis

Snifscore: 91/100
High-risk factors: 1
Medium-risk factors: 1
Low-risk factors: None

Summary of (5) Contract Passed Indicators

Balanced ownership in top 10 wallets
No concerning metadata found
Significant portion of the LP is locked or burned
Recent user activity confirmed
Established contract stability

Find Out if DRIFT Is a Fraudulent Token

Detecting a scam project requires a combination of caution, research, and vigilance. Fraudsters come up with numerous ways to trick investors, staying awake to the warning signs before falling victim.

One of the first red flags is an offer that guarantees high returns with little to no risk. Rug pulls are the most common scam at the moment, the project creators build hype around a new Solana project and then disappear with the profits. If the team of a project stops providing updates, it could be a sign of trouble.

A few tips to protect yourself is to research the team behind a project, see how well they execute their roadmap, use secure wallets, enable 2FA and avoid giving your personal data to social media giveaways.