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

Following a significant exploit that resulted in the loss of over $270 million in client assets, Drift Protocol has announced plans to relaunch with 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 up to $127.5 million from Tether and $20 million from other partners, aims to support user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC as its 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 to cover approximately $295 million in user losses over time. The exploit, which occurred on April 1, was carried out by a North Korea-linked group that had infiltrated Drift Protocol by posing as a quantitative trading firm for about six months. The incident led to a significant loss of value for Drift's governance token, DRIFT, which has plummeted by around 70% since the exploit. The funding package also includes plans for Tether to fund fee reductions and user incentives tied to Drift's transition to USDT, as well as liquidity support for designated market makers to enhance trading depth at relaunch. This move is expected to position USDT at the center of Drift's trading infrastructure, providing a pathway to restore user funds and resume operations.