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

Following a significant exploit linked to North Korea, Drift Protocol has announced plans to relaunch with Tether's USDT as its primary settlement layer, backed by a proposed $147.5 million funding package from Tether and other partners. The deal comprises $127.5 million from Tether and $20 million from additional partners, aiming to facilitate user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana. Previously, Drift utilized Circle's USDC as its settlement layer. The rescue package includes 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 of over $270 million on April 1. Drift's governance token, DRIFT, has since lost around 70% of its value. The exploit highlighted differences in the approaches of USDC and USDT issuers to handling such incidents, with USDT being more agile in 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 reflects the intensifying competition in the stablecoin market. While USDT maintains a significant lead, USDC has been gaining ground due to its regulatory alignment and growing institutional adoption. The funding package also includes plans for fee reductions, user incentives, and liquidity support to bolster trading depth upon relaunch, positioning USDT at the core of Drift's trading infrastructure and providing a pathway for user fund restoration and operational resumption.