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

In the wake of a devastating North Korean-led exploit, Drift Protocol has announced plans to relaunch with Tether's USDT as its primary settlement layer, backed by a substantial 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. Drift previously utilized Circle's USDC as its settlement layer. The rescue package encompasses 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 offset roughly $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. The platform's governance token, DRIFT, has since lost approximately 70% of its value. The exploit also sparked controversy surrounding Circle's response, with some critics arguing that the company could have acted more swiftly to freeze funds and prevent the attacker from transferring assets. However, Circle's CEO, Jeremy Allaire, emphasized that the company only freezes USDC wallets when directed by law enforcement or courts, citing legal risks. In contrast, USDT has demonstrated a more agile approach to freezing funds linked to hacks or illicit activities. As the largest decentralized perpetual futures exchange on Solana, Drift boasts over 175,000 users and a cumulative trading volume of approximately $150 billion. Founded in 2021, the platform offers a range of services, including perpetuals, spot trading, lending, borrowing, and cross-margin trading. The stablecoin market is becoming increasingly competitive, with exchanges, fintechs, and traditional institutions vying for control of on-ramps, liquidity, and settlement layers. While USDT maintains a significant lead, USDC has been steadily gaining ground, driven by regulatory alignment and growing institutional adoption. With this new funding package, Tether plans to support fee reductions, user incentives, and liquidity support for Drift's transition to USDT, bolstering trading depth at relaunch. This move positions USDT at the core of Drift's trading infrastructure, providing a pathway for the platform to restore user funds and resume operations.