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

Following a significant exploit that resulted in the loss of over $270 million in client assets, Drift Protocol has announced plans to relaunch with Tether's USDT as its primary settlement layer, backed by a substantial funding package of up to $147.5 million from Tether and its partners. This deal comprises $127.5 million from Tether and $20 million from other partners, structured as a combination of revenue-linked credit facilities, ecosystem grants, and loans to market makers. A portion of the trading revenue will be allocated to a recovery pool to cover approximately $295 million in user losses over time. The exploit, linked to a North Korean group, led to a significant decline in the value of Drift's governance token, DRIFT, which has lost around 70% of its value since the incident. The funding package is designed to support user recovery and facilitate the platform's transition to a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC as its settlement layer. This move comes amid growing competition in the stablecoin market, with USDT and USDC vying for dominance. Tether's investment in Drift is expected to enhance the platform's trading infrastructure, provide a pathway for restoring user funds, and bolster its position in the market.