Drift Secures $148 Million in Funding from Tether and Partners to Recover from Exploit

Following a significant exploit linked to a North Korean group, Drift Protocol has announced plans to relaunch with Tether's USDT as its settlement layer, thanks to a proposed funding package of up to $147.5 million from Tether and its partners. The deal comprises $127.5 million from Tether and $20 million from other partners, aiming to support user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC as its settlement layer. The rescue package includes a revenue-linked credit facility, ecosystem grants, and loans to market makers, with a portion of trading revenue and committed capital directed towards a recovery pool to cover roughly $295 million in user losses over time. This development comes after Drift's governance token, DRIFT, lost approximately 70% of its value since the exploit, and Circle faced criticism for not halting the money transfer promptly. In contrast, USDT has demonstrated its ability to freeze funds linked to hacks or illicit activities. As the largest decentralized perpetual futures exchange on Solana, Drift boasts over 175,000 users and $150 billion in cumulative trading volume, offering a range of services including perpetuals, spot trading, lending, and cross-margin trading. The stablecoin market is becoming increasingly competitive, with Circle's USDC gaining share due to regulatory alignment and growing institutional use, while USDT still maintains a significant lead. The new funding package will also enable Tether to fund fee reductions and user incentives tied to Drift's transition to USDT, as well as provide liquidity support to designated market makers, bolstering trading depth at relaunch.