Drift Protocol Records Highest Ever Post-TGE Weekly Trading Volume, Reversing Trend

Drift Protocol, a leading Solana-based DEX, seems to have bucked convention and defied expectations following its highly anticipated TGE (Token Generation Event) on May 16, 2024.

Slowly but Surely, Trading Volume Returns Post-Airdrop

As we’ve seen time and time again in the crypto space, incentivized rewards in the form of an airdrop are a common method of bolstering onchain metrics and attracting users to a certain protocol. In most cases, airdrop farmers are quick to abandon an application after receiving rewards.

However, onchain data suggests that Drift Protocol has avoided this fate, and continues to provide liquid markets and a quality trading experience for its thousands of users. 

While many might have expected the platform to fade into obscurity as farmers reallocated capital to new projects, Drift Protocol has enjoyed steady growth following the launch of its native token, DRIFT.

Amidst a market-wide downturn, Drift Protocol recorded its highest-ever weekly trading volume since TGE, handling over $1.2B in trades last week. This figure implies that the platform has retained a dedicated user base despite the absence of rewards.

The Drift Protocol team also used the milestone as an opportunity to tease the launch of Fuel, their upcoming next-gen rewards program.

Trading Volume Climbs, But What About Adoption?

The numbers don’t lie. While admittedly, Drift Protocol suffered a significant reduction in trading volume since figures recorded pre-TGE, the metrics point to a resurgence in trading volume on the platform since late May.

Trading volume has gained week-on-week since May 27, returning to levels previously seen during the period when traders were eligible to earn rewards. Despite the majority of tradeable assets on the platform decreasing in USD value, Drift Protocol appears to have established a new trend of increasing volumes in the exchange.

This trend is further supported by the Drift Protocol's TVL (Total Value Locked), which maintained consistent growth throughout the project's lifespan, per DefiLlama data. The USD value of Drift Protocol's TVL may have dropped in recent weeks, but this is due more to a decrease in asset value than user withdrawals.

However, it’s not all good news for the popular perpetual DEX. While Drift Protocol’s trading volume and TVL show promising signs of growth, the number of new users trading on the platform has dramatically diminished.

After having onboarded thousands of new users every week through Q1, the number of accounts trading on Drift Protocol has plummeted since TGE, unable to record over 1,000 weekly new users since April 22, 2024.

Airdrop Farmer Abandonment: How Does Drift Compare With Other Solana Projects?

By steadily growing its SOL-based TVL and witnessing successive weeks of increased trading volume, Drift Protocol is something of a diamond in the rough. Even ecosystem heavyweights like Tensor aren’t immune to the exodus of users and activity in the wake of a TGE.

Since Tensor’s Season 3 rewards program ended on April 2nd, the NFT marketplace’s weekly trading volume has plummeted. In the final week before the end of Tensor Season 3 and the official announcement of $TNSR, the NFT marketplace transacted over $21M in trading volume.

According to Dune Analytics data, this figure has dropped by over 92%, with Tensor managing just over $1.6M last week. Prior to the hotly anticipated launch of TNSR, the marketplace dominated NFT trading volume in the ecosystem, boasting a market share of over 60% in December.

NFT market dominance has since returned to Magic Eden in anticipation of their own airdrop, with Tensor market share dropping to as low as 23.11% on a monthly timeframe, according to Tiexo data.

In comparison, Drift Protocol fares remarkably well. Weekly trading fees on the platform are up over 100% since Drift’s allocation checker went live on May 1st, while being down around 47% since all-time highs, recorded in the week before the DRIFT token was officially announced.

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