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

Following a recent exploit that resulted in the loss of over $270 million, Drift Protocol has announced plans to relaunch with Tether's USDT as its settlement layer, after securing a funding package of up to $147.5 million from Tether and its partners. The package, which includes a revenue-linked credit facility, ecosystem grants, and loans to market makers, aims to support user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana. Previously, the platform utilized Circle's USDC as its settlement layer. A portion of the trading revenue will be directed towards a recovery pool to cover roughly $295 million in user losses over time. The funding comes after a North Korea-linked group infiltrated Drift Protocol, resulting in a significant loss of funds. Drift's governance token, DRIFT, has lost approximately 70% of its value since the exploit. The incident has sparked controversy, with some critics arguing that Circle could have taken swifter action to freeze funds and prevent the attacker from transferring assets. However, Circle's approach is to only freeze USDC wallets when directed by law enforcement or courts. In contrast, USDT has been more proactive in freezing assets linked to hacks or illicit activities. As the largest decentralized perpetual futures exchange on Solana, Drift boasts over 175,000 users and $150 billion in cumulative trading volume. The platform's transition to USDT is expected to position USDT at the center of its trading infrastructure, providing a pathway to restore user funds and resume operations.