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 proposed deal comprises $127.5 million from Tether and $20 million from other partners, structured to facilitate user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana, replacing 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 directed towards a recovery pool to cover approximately $295 million in user losses over time. The exploit, linked to a North Korean group, resulted in the loss of over $270 million on April 1, causing Drift's governance token, DRIFT, to plummet by about 70% in value. The incident sparked controversy surrounding Circle's handling of the exploit, with critics arguing that the company could have acted faster to freeze funds and prevent the attacker from transferring assets. In contrast, Tether has demonstrated its ability to freeze assets linked to hacks or illicit activities promptly. 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, providing a pathway to restore user funds and resume operations.