Drift Secures $148 Million in Funding to Recover from Massive Exploit and Relaunch with USDT

Following a significant exploit linked to North Korea, Drift Protocol is set to relaunch with Tether's USDT as its settlement layer after securing a substantial funding package of up to $147.5 million from Tether and its partners. The funding package, which includes $127.5 million from Tether and $20 million from other partners, is designed to support user recovery and reboot the platform. Previously, Drift utilized Circle's USDC as its settlement layer. The rescue package comprises a revenue-linked credit facility, ecosystem grants, and loans to market makers, with a portion of trading revenue and committed capital allocated to a recovery pool aimed at covering roughly $295 million in user losses over time. The exploit, which occurred on April 1, resulted in losses of over $270 million and led to a 70% decline in the value of Drift's governance token, DRIFT. The incident also sparked criticism of Circle for its handling of the situation, with some arguing that the company could have acted more swiftly to freeze funds and prevent the attacker from transferring assets. In contrast, Tether has demonstrated a willingness to freeze assets linked to illicit activities. As the largest decentralized perpetual futures exchange on Solana, Drift boasts over 175,000 users and a cumulative trading volume of approximately $150 billion. The company's decision to transition to USDT reflects the intensifying competition in the stablecoin market, with Circle's USDC gaining ground on Tether's long-standing dominance. With the new funding package, Tether plans to support fee reductions and user incentives tied to Drift's transition to USDT, while providing liquidity support to market makers. The move positions USDT at the center of Drift's trading infrastructure, paving the way for the platform to restore user funds and resume operations.