Following a recent exploit that saw over $270 million in client assets compromised, Drift Protocol has announced plans to relaunch with Tether's USDT as its settlement layer, thanks to a proposed funding package of up to $147.5 million from Tether and its partners. The package, which includes up to $127.5 million from Tether and $20 million from other partners, is designed 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. The rescue package combines 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 aimed at covering roughly $295 million in user losses over time.
The funding comes after a North Korea-linked group infiltrated Drift Protocol, resulting in a significant exploit on April 1. The incident led to Circle facing criticism for its handling of the situation, with some arguing that the company could have moved faster to blacklist wallets and freeze funds. In response, Circle's CEO, Jeremy Allaire, stated that the company only freezes USDC wallets when directed by law enforcement or courts. Meanwhile, Tether has demonstrated a more agile approach to freezing funds linked to hacks or illicit activities.
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 seen as a strategic move in the intensifying competition among stablecoins. With USDT still leading the market, despite USDC's growing share and transaction volume, Tether's funding package is expected to support fee reductions, user incentives, and liquidity support for Drift's relaunch.