Introducing Drift Protocol
Drift Labs is thrilled to announce a new brand that mirrors the team’s long-term vision of a lightning fast, decentralized derivatives protocol. Drift brings on-chain, cross-margined perpetual futures to Solana.
Drift Lab’s goal to make futures DEXs the best way to trade.
Drift Lab’s vision is to bring a state-of-the-art trader-centric experience from centralized derivatives exchanges on-chain, and Drift’s team of experienced traders and builders are working hard to make this a reality.
Introducing Drift Protocol
Their vision at Drift is a truly modern, crypto-native exchange should be:
- Smooth: Laser-fast with low-fees. Low-slippage. Joyful.
- Permissionless: Anyone can trade any market. Anyone can run a liquidator bot. Anyone can host a UI.
- Transparent: Transparent pricing mechanism, reducing the likelihood of front-runners or malicious actors. No hidden fees, no ambiguous fills.
- Immersive: Trading meets the metaverse.
Drift’s first version will be built on Solana. This will take the form of a perpetuals exchange.
Drift’s v0 Launch
Drift is built on Solana because it provides low latency block times and high bandwidth to enable the quickest settlement possible with the lowest transaction fees possible.
Here’s a snapshot of what v0 on its Devnet will look like:
Trading
All trading is done against Drift’s vAMM. Drift supports market orders with a pre-defined maximum slippage. Maximum slippage can be pre-set from a price to ensure that users can have their orders cancelled should there be risk of having poorer execution prices.
Cross Margin
Cross-margining refers to collateralizing multiple leveraged positions with a single pool of collateral, with margin and risk is shared across the positions as a whole.
The benefit of cross-margining over isolated is that margin is effectively able to be distributed as needed across all positions. This ensures that liquidations don’t occur because of a single position’s margin ratio falling below maintenance margin.
Cross-margining enables users to trade without needing to move collateral across individual sub-accounts, which achieves greater capital efficiency and reduces liquidation likelihood of individual positions.
Liquidations
Anyone is able to run a liquidator bot to reduce and close positions of a user whose margin ratio is below the preset margin requirements (both partial and full). The remaining collateral penalty is split equally between the insurance fund and liquidator. Leveraged losses beyond 0% margin are solely absorbed by Drift’s Insurance Fund.
Drift introduces partial liquidations to reduce the likelihood of getting entirely liquidated by offloading users’ position. A user is in multiple positions will have each position reduced by 25% of their position’s notional size.
Drift is excited to release a litepaper which provides a technical overview of the v0 they plan to launch on Devnet in September 2021.
About Drift Protocol
A scalable, decentralised, capital-efficient derivatives exchange built on Solana.
A DEX with all the features you expect.
A fast, responsive trading experience. Powered by Solana’s low latency blockchain.
Full cross-margin trading support. Take multiple positions using a single pool of collateral.
vAMM liquidity from day 1. Immediate liquidity from listing. Trade instantly.
Permissionless by design. Anyone can trade anything, anytime.
Transparent pricing. When you trade against Drift’s vAMM, you know exactly the price you transact at.Website ♦ Twitter ♦ Medium ♦ Discord ▶️ SOURCE
