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 in client assets, Drift Protocol has announced plans to relaunch with Tether's USDT as its settlement layer, backed by a proposed funding package of up to $147.5 million from Tether and its partners. The deal comprises up to $127.5 million from Tether and $20 million from other partners, structured as a revenue-linked credit facility, ecosystem grants, and loans to market makers to support user recovery and reboot the platform. A portion of trading revenue will be allocated to a recovery pool to cover roughly $295 million in user losses over time. The exploit, linked to a North Korean group, led to a significant decline in the value of Drift's governance token, DRIFT. Circle, the issuer of USDC, faced criticism for not halting the transfer of exploited funds, citing legal risks. In contrast, Tether has a history of 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 funding package also includes plans for fee reductions and user incentives tied to Drift's transition to USDT, as well as liquidity support for designated market makers. This move positions USDT at the center of Drift's trading infrastructure, providing a pathway to restore user funds and resume operations.