Drift Secures $148 Million in Funding to Recover from Exploit and Transition to USDT

Following a significant exploit that resulted in the loss of over $270 million in client assets, Drift Protocol has announced plans to relaunch using Tether's USDT as its primary settlement layer, thanks to a $147.5 million funding package from Tether and its partners. The funding is structured to support 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 roughly $295 million in user losses over time. The exploit, linked to a North Korean group, led to criticism of Circle for not freezing funds in a timely manner, highlighting the differences in approach between Circle and Tether in handling such incidents. The transition to USDT is seen as a strategic move, with Tether planning to fund fee reductions, user incentives, and liquidity support to bolster trading depth at relaunch, positioning USDT at the center of Drift's trading infrastructure and providing a pathway to restore user funds and resume operations.