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

Following a substantial exploit linked to a North Korean group, Drift Protocol has announced plans to relaunch its platform using Tether's USDT as its primary settlement layer, thanks to a funding package of up to $147.5 million from Tether and its partners. The package, which includes $127.5 million from Tether and $20 million from other partners, is designed to support the recovery of user funds and reboot the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC. The funding deal combines 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 approximately $295 million in user losses over time. The exploit, which occurred on April 1, resulted in losses exceeding $270 million and led to a significant decline in the value of Drift's governance token, DRIFT. Circle, the issuer of USDC, faced criticism for not halting the transfer of exploited funds, citing legal risks. In contrast, Tether has a history of freezing assets linked to hacks and illicit activities. As the largest decentralized perpetual futures exchange on Solana, with over 175,000 users and $150 billion in cumulative trading volume, Drift's transition to USDT is expected to bolster its trading infrastructure and provide a pathway for restoring user funds. The move also reflects the intensifying competition in the stablecoin market, with USDT and USDC vying for dominance. With this funding, Tether plans to support fee reductions, user incentives, and liquidity support for Drift's relaunch, further solidifying USDT's position in the market.