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

In the aftermath of a devastating North Korean-led exploit, Drift Protocol has announced plans to relaunch with Tether's USDT as its new 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 facilitate user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC. The rescue package combines revenue-linked credit facilities, ecosystem grants, and loans to market makers, with a portion of trading revenue and committed capital allocated to a recovery pool to cover approximately $295 million in user losses over time. This development comes on the heels of a North Korea-linked group infiltrating Drift Protocol, resulting in a $270 million exploit on April 1, which led to Drift's governance token, DRIFT, losing around 70% of its value. The exploit also sparked controversy surrounding Circle's response, with critics arguing that the company could have acted faster to freeze funds and prevent the attacker from transferring assets. In contrast, Tether has a history of swiftly freezing assets linked to 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 marks a significant shift in the stablecoin landscape, with Tether seeking to solidify its position amidst intensifying competition from Circle's USDC.