Following a devastating exploit that resulted in the loss of over $270 million in client assets, Drift Protocol has announced a major funding package of up to $147.5 million from Tether and other partners. This investment will be utilized to recover user funds and relaunch the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC as its settlement layer. The funding package, which includes a revenue-linked credit facility, ecosystem grants, and loans to market makers, aims 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, which was linked to a North Korea-based group, led to a significant decline in the value of Drift's governance token, DRIFT. The incident also sparked controversy surrounding Circle's response to the attack, with some critics arguing that the company could have acted faster to freeze funds and prevent the attacker from transferring assets.
In contrast, Tether has a history of swiftly freezing assets linked to hacks or illicit activities. As the largest decentralized perpetual futures exchange on Solana, Drift boasts over 175,000 users and approximately $150 billion in cumulative trading volume. The platform's transition to USDT is expected to position the stablecoin at the center of its trading infrastructure, providing a pathway to restore user funds and resume operations. The move is also seen as a strategic play in the intensifying competition among stablecoin issuers, with Circle's USDC gaining ground on Tether's long-standing dominance in recent months.