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

Following a recent exploit that resulted in the loss of over $270 million in client assets, Drift Protocol has announced plans to relaunch using Tether's USDT as its settlement layer, thanks to a proposed funding package of up to $147.5 million from Tether and its partners. The package, which includes a revenue-linked credit facility, ecosystem grants, and loans to market makers, aims to support user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana. Previously, the platform utilized Circle's USDC as its settlement layer. A portion of the trading revenue will be allocated to a recovery pool to cover roughly $295 million in user losses over time. The funding comes after a North Korea-linked group infiltrated Drift Protocol, resulting in a significant loss of funds. The incident led to criticism of Circle for not halting the money transfer, with some arguing that the company could have moved faster to blacklist wallets and freeze funds. In response, Circle's CEO stated that the company only freezes USDC wallets when directed by law enforcement or courts. The switch to USDT is seen as a strategic move, given USDT's ability to freeze funds linked to hacks or illicit activities. As the largest decentralized perpetual futures exchange on Solana, Drift boasts over 175,000 users and approximately $150 billion in cumulative trading volume. The competition in the stablecoin market is intensifying, with USDT still leading but USDC gaining ground due to regulatory alignment and growing institutional use. 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.