A decentralized exchange (DEX) altcoin based on Solana is on the rise after a major crypto investment firm announced a major stake in the project. According to a new announcement from Multicoin Capital, the firm, which has $1.4 billion in assets under management, has established a significant position in a project called Drift Protocol. Drift is an open-source DEX that offers transparent and custody-free trading.
Position of Multicoin Capital
Multicoin Capital says it has built a large position in Drift’s native token, DRIFT, across both of its funds — both liquid and venture funds. The firm has built this position over the past few years across private and public markets. On the day of the announcement, Drift’s price rose by double digits to $0.56. Drift is currently trading at $0.55, up almost 19% in the past 24 hours.
Future Potential of Drift
According to Multicoin Capital’s analysis of Drift, the digital asset could rise to as high as $3.58. The analysis believes that the protocol has the potential to grow even further as user and liquidity migration to Drift and Solana continues. The desire of people, especially in developing countries, for synthetic access to all types of assets suggests that decentralized finance derivatives are the most innovative and inclusive products to meet these needs.
Valuation and Market Assumptions
Based on its valuation frameworks and market assumptions, Multicoin Capital values DRIFT at $3.58, which is more than 7 times the current market price. The investment firm details this estimate in its reports, stating that DRIFT has the potential to be significantly above its current market price.
Multicoin Capital’s confidence in Drift Protocol is also supported by the firm’s past investments. The firm has taken a large position in Drift in line with its strategy of investing in projects with long-term growth potential. This is considered an indication of confidence in the project.
In general, positive expectations regarding the future of Drift Protocol and user demand are increasing investors’ interest in this project. This major investment from Multicoin Capital could positively affect Drift’s market value and increase confidence in the project.
Disclaimer: The information contained in this article does not contain investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should carry out their transactions in line with their own research.
