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 a funding package of up to $147.5 million from Tether and its partners to facilitate user recovery and relaunch the platform as a USDT-based perpetual futures exchange on Solana. The package, which includes a revenue-linked credit facility, ecosystem grants, and loans to market makers, will support the recovery of roughly $295 million in user losses over time. A portion of the trading revenue will be allocated to a recovery pool to achieve this goal. Drift's decision to transition from Circle's USDC to USDT as its settlement layer comes after the recent exploit, which led to criticism of Circle's response to the incident. In contrast, Tether has a history of freezing assets linked to hacks and illicit activities, making it a more attractive option for Drift. 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 to enhance trading depth at relaunch. This move is expected to position USDT at the center of Drift's trading infrastructure, providing a pathway to restore user funds and resume operations.