What is Drift Trade?
Drift Trade (part of Drift Protocol) is a decentralized exchange focused on perpetual futures built on the Solana blockchain. It brings derivatives-style functionality—perpetual swaps, leveraged positions, and cross-margining—into a non-custodial environment so traders keep custody of their assets while accessing advanced on-chain execution and risk systems.
Core Features
Trade perpetual contracts (no expiry) for major crypto assets with leverage and continuous funding.
Use a single collateral pool across positions to increase capital efficiency and reduce overall margin requirements.
Built on Solana for sub-second finality and low fees, enabling fast fills and tight spreads.
Combines automated market making with liquidity-on-demand mechanisms to minimise slippage for large orders.
How Drift Trade Works (Step-by-Step)
- Connect a Solana wallet: Use Phantom, Solflare, Backpack or another compatible wallet to connect.
- Deposit collateral: Fund your margin account with USDC or supported tokens.
- Choose a market: Pick a perpetual market (e.g., SOL-PERP, BTC-PERP) and set order type.
- Set leverage & execute: Select leverage, review margin impact and submit your order; sign on-wallet to authorize.
- Manage positions: Monitor PnL, adjust leverage, set stops/limits, or close the position on-chain.
Risk Management & Safety
Because perpetuals are leveraged products, Drift provides a layered risk framework: margin requirements, on-chain liquidation mechanics, insurance funds, and emergency circuit breakers. Traders should understand cross-margin exposure, funding rate dynamics, and how liquidations are executed on a decentralized ledger before deploying significant capital.
Why Traders Choose Drift
- Non-custodial control—you trade straight from your wallet.
- Competitive capital efficiency through cross-margin and yield on deposits.
- Access to a variety of perp markets with deep on-chain liquidity and fast execution.
FAQ — Quick answers
- Is Drift centralized or decentralized?
- Drift is a decentralized protocol running on Solana; smart contracts handle trading logic while users retain custody of funds.
- What collateral is accepted?
- USDC is the primary collateral on many markets; supported tokens vary — check the app for live details.
- How much leverage can I use?
- Leverage limits are market-dependent; the protocol supports a wide range (from modest up to very high on specific markets). Use caution—higher leverage increases liquidation risk.
- Where can I trade?
- Trade via the official Drift app and consult the protocol docs for advanced workflows and developer resources.
- Is there insurance for liquidations?
- Yes—Drift maintains insurance and risk engines designed to absorb tail events and protect users in extreme volatility.
- How are fees handled?
- Fees are disclosed in the trading interface and include maker/taker components plus on-chain costs. Check the app for real-time fee schedules.
Note: Derivatives are high-risk instruments. Always read the protocol documentation and consider starting with small test amounts while you learn how on-chain perpetuals function.