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

Following a devastating exploit that resulted in the loss of over $270 million in client assets, Drift Protocol has secured a significant funding package of up to $147.5 million from Tether and other partners. This investment will facilitate the recovery of user funds and support the relaunch of the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC as its settlement layer. The funding package, comprising a revenue-linked credit facility, ecosystem grants, and loans to market makers, aims to cover approximately $295 million in user losses over time. A portion of the trading revenue will be directed towards a recovery pool to achieve this goal. The exploit, which occurred on April 1, was attributed to a North Korea-linked group that infiltrated Drift Protocol by posing as a quantitative trading firm for about six months. The incident led to a significant loss of value for Drift's governance token, DRIFT, which has plummeted by about 70% since the exploit. The funding package also includes provisions for fee reductions and user incentives tied to Drift's transition to USDT, as well as liquidity support for designated market makers to enhance trading depth at relaunch. This development marks a significant shift in the stablecoin landscape, with Tether's USDT poised to play a central role in Drift's trading infrastructure.