What is Drift Coin? A Comprehensive Guide to Drift Protocol

Source: BTCHaber Original Title: What is Drift coin? Original Link:

What is Drift Coin?

Drift coin is the cryptocurrency of Drift Protocol. Drift Protocol is a decentralized exchange built on the Solana blockchain (DEX). In other words, it is a platform where you can directly buy and sell cryptocurrencies from your own crypto wallet and borrow or lend.

How Does It Work?

On Drift, users trade directly through their own wallets. This way, they have full control over their assets. All transactions on the platform are recorded instantly on the chain. Thanks to the Hybrid Liquidity Mechanism, transactions are not executed from a single source.

In the hybrid structure, real-time auction processes called Just-in-Time (JIT), decentralized limit order book (DLOB), and a backup Automated Market Maker (AMM) are used. This approach aims to access deep liquidity even during volatile periods.

Drift Founders

Drift was founded in 2021 by Cindy Leow. Currently, it includes well-known crypto entrepreneurs among its partners.

Operating Mechanism

Drift manages risk control through a cross-collateralization structure. All transactions are stored in a centralized vault called the Global Collateral Vault. This ensures smooth borrowing, lending, and trading operations.

Assets are weighted according to their volatility. For example, USDC can be used at a one-to-one ratio, while more volatile assets like Solana can have collateral adjusted to provide only 80% of their value. Users can also use subaccounts to isolate various transactions.

For the protocol to operate healthily, it relies on decentralized agents and external data. Keeper bots perform essential tasks such as matching orders, triggering stop-losses, and liquidating unhealthy accounts.

The platform uses external price feeds to determine fair market prices. The importance of these feeds lies in preventing liquidations and funding rates from solely relying on current exchange prices. Instead, they are triggered based on oracle prices. This is a process adopted to protect the system from price manipulation.

Uses of Drift Coin

The main use cases of Drift coin are based on the transactions it facilitates on the platform:

• Perpetual Futures: Users can speculate on the price increase or decrease of an asset without time limits. The maximum leverage offered by the platform is 101x.

• Spot Trading: Users can buy and sell directly. Leverage up to 5x is available for these transactions.

• Borrowing and Lending: Users can deposit assets to earn yields or borrow against their existing assets as collateral.

• Prediction Markets: Allows making predictions about the outcomes of real-world events.

How to Buy Drift Coin?

To buy Drift, first you need to create an account on a crypto exchange. You must complete the identity verification process. To complete the purchase, you need a balance in your wallet. If you don’t have a balance, you can choose payment methods like bank transfer or credit card.

After depositing funds, you can buy the amount of assets you want:

1. Click on “Buy/Sell” or “Markets” on the platform homepage
2. Search for Drift to switch to buying mode
3. Click the “Buy” button to start your transaction
4. Enter the amount in Turkish Lira and proceed
5. Confirm your transaction — your crypto purchase will be executed immediately and credited to your account shortly