Solana DEX Drift to Airdrop 100M Tokens in Weeks

According to reports from Drift’s website and reliable sources, the decentralized exchange (DEX) built on the Solana blockchain, Drift protocol, is planning to introduce its governance token named DRIFT within a few weeks. The token will be distributed as an airdrop to the platform’s users.

In Drift, which is among the largest platforms for Solana DeFi’s perpetual trading, a new token is now available. This token offers a rewards program that lasts for three months and attracted traders, borrowers, lenders, and even airdrop farmers. However, insiders involved in the protocol shared that about 100 million tokens set aside for this airdrop are intended for long-term Drift users.

In the crypto sphere, airdrops signify giving out complimentary digital tokens or coins to people.

Drift, the newest financial innovation on Solana, aims to decentralize its control by issuing a token that allows holders to participate in significant decisions at the exchange, such as which coins to add or when to implement software upgrades. In this distribution event, 10% of Drift’s total token supply will be allocated to its users.

The venture capitalists investing in DRIFT are in line for a significant stake of 22%. Notable crypto VCs Polychain Capital and Multicoin Capital, along with some angel investors, including Solana’s founders Anatoly Yakovenko and Raj Gokal, have collectively contributed over $25 million towards the project since 2021.

Approximately forty-three percent of the allocated tokens will be used for “ecosystem enhancement,” which may involve trading rewards, liquidity incentives, and potential future airdrops. Additionally, twenty-five percent of the tokens are set aside for “protocol development” compensation to Drift’s team members, as stated on their website.

Developers of the Drift protocol aim to transform their trading platform into a go-to destination for crypto investors on the Solana network. The primary offering is perpetual contracts, enabling price speculators to buy or sell cryptocurrencies with up to 20 times leverage.

At Drift, you can not only engage in spot trading but also access various exotic financial instruments, providing investors with opportunities to take on higher risk and potentially greater rewards. A new feature introduced by Drift allows users to wager on tokens that have yet to be launched, although for legal reasons, it will not support this service for the DRIFT token itself.

In an interview, Cindy Leow, a key contributor at Drift Labs, explained that their objective went beyond merely creating a Decentralized Exchange (DEX) for ne’erdoers. Instead, Drift Labs dedicated over two years, an immense financial investment of tens of millions of dollars, and the efforts of its 25 team members to develop a comprehensive “value stack” for DeFi in its entirety.

During last week’s significant crypto market downturn, some instances underwent stress testing. Specifically, Drift’s insurance fund lenders, which is a high-yield USDC reserve designed to safeguard the protocol against bad debts, experienced approximately $11,600 in shared losses – the largest such occurrence since November 2021.

The insurance fund acted as a safety net during the sudden price drop, preventing a tide of liquidations and bankruptcies at Drift.

OnFriday morning during the market crash, Leow stated that our open interest amounted to $200 million. Ten percent of this total was subsequently liquidated. This marked the most significant one-day market shift since December. However, she reassured us that the liquidation process is progressing smoothly.

Governance Changes

The governance of Drift’s Control will be transferred from Drift Labs to a tripartite administration. At the helm is a security council, responsible for overseeing protocol upgrades. Initial members of this council are expected to hail from within Drift. However, they require approval from Drift’s Realms DAO, which grants voting power to token holders.

At Drift, the third aspect of our governance structure is called the Futarchy DAO. In simpler terms, this means that traders have the power to influence decisions through buying or selling the DRIFT token in specific market conditions.

In simpler terms, the market that results in a higher price at the end of trading sessions is considered the winning one. Transactions in this market are finalized, while those in the losing market are adjusted or reversed. The corresponding buy or sell orders are carried out accordingly.

Leow shared that Drift team members discovered futarchy during the mtnDAO event in Salt Lake City, Utah, in February. Eagerly persuaded, they returned determined to incorporate this unconventional concept into Drift: that markets can make wiser decisions than democracies. “We’re working with MetaDAO behind the scenes,” she explained.

In simpler terms, Futarchy Decentralized Autonomous Organization (DAO) determinations concern the allocation of ecosystem funds through DRIFT tokens. This involves deciding who receives the money, for what purposes, and the corresponding amounts.

A press announcement given to CoinDesk detailed potential investments in new projects for Drift, such as creating trading bots, validator clients, and alternative user interfaces for its open-source trading platform.

An approach we’re considering is examining Solana’s evolution into a more decentralized platform, as suggested by Leow. Our plan is to put resources into teams developing their own frontend projects.