Drift Secures $148 Million in Funding from Tether and Partners to Revamp Protocol

Following a recent high-profile exploit linked to North Korea, 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. The package, which includes up to $127.5 million from Tether and $20 million from other partners, is structured to support the recovery of user funds and the rebooting of the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC as the settlement layer. The deal 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 approximately $295 million in user losses over time. This development comes after Drift suffered an exploit on April 1, resulting in losses exceeding $270 million, and its governance token, DRIFT, has since lost around 70% of its value. The incident also sparked criticism towards Circle for its handling of the exploit, particularly its decision not to halt the transfer of funds. In contrast, Tether has demonstrated a more proactive approach to freezing assets linked to illicit activities. As the largest decentralized perpetual futures exchange on Solana, with over 175,000 users and around $150 billion in cumulative trading volume, Drift's transition to USDT is set to significantly impact the stablecoin landscape. The competition among stablecoins is intensifying, with exchanges, fintech companies, and traditional financial institutions competing to control the on-ramps, liquidity, and settlement layers that underpin digital asset markets. While USDT maintains a significant lead in terms of market supply, USDC has been gaining ground, driven by its regulatory alignment and growing institutional adoption. The new funding package not only supports Drift's recovery but also positions USDT at the core of its trading infrastructure, providing a pathway to restore user funds and resume operations.