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 its platform with Tether's USDT as its primary settlement layer, thanks to a substantial funding package of up to $147.5 million provided by Tether and its partners. This deal, totaling $127.5 million from Tether and $20 million from other partners, aims to support the recovery of user funds and reboot the platform as a USDT-based perpetual futures exchange on Solana, replacing its previous use of Circle's USDC. The funding 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. The exploit, linked to a North Korea-based group, resulted in losses exceeding $270 million on April 1, causing Drift's governance token, DRIFT, to plummet by about 70% in value. Circle faced criticism for its handling of the situation, particularly its decision not to halt the transfer of funds, citing legal risks. In contrast, Tether has demonstrated a more proactive approach to freezing assets 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 expected to position the stablecoin at the center of its trading infrastructure, facilitating the restoration of user funds and the resumption of operations.