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

Following a significant exploit, Drift Protocol has announced plans to relaunch with Tether's USDT as its primary settlement layer, after securing a substantial 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 facilitate user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC. The funding 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 to cover approximately $295 million in user losses over time. This development comes after a North Korea-linked group infiltrated Drift Protocol, resulting in losses exceeding $270 million on April 1, and a subsequent 70% decline in the value of Drift's governance token, DRIFT. The incident sparked criticism of Circle for not halting the transfer of funds after the exploit, with some arguing that the company could have acted faster to prevent the attacker from moving assets. In contrast, Tether has a history of freezing funds linked to hacks or 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 seen as a strategic move in the intensifying competition among stablecoins. With this funding package, Tether aims to support Drift's relaunch, reduce fees, and provide user incentives, while extending liquidity support to market makers to enhance trading depth.