Following a massive exploit that resulted in the loss of over $270 million in client assets, Drift Protocol has announced a proposed funding package of up to $147.5 million from Tether and its partners. The package, which includes $127.5 million from Tether and $20 million from other partners, aims to support user recovery and relaunch the platform as a USDT-based perpetual futures exchange on Solana. Previously, the platform utilized Circle's USDC as its settlement layer. The funding package comprises a revenue-linked credit facility, ecosystem grants, and loans to market makers, with a portion of trading revenue and committed capital allocated to a recovery pool to cover approximately $295 million in user losses over time.
The exploit, which was linked to a North Korean group, occurred on April 1 and resulted in the loss of over $270 million. Drift's governance token, DRIFT, has since lost around 70% of its value. The incident also sparked criticism of Circle's handling of the situation, with some 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 freezing assets linked to hacks and illicit activities.
As the largest decentralized perpetual futures exchange on Solana, Drift has over 175,000 users and a cumulative trading volume of approximately $150 billion. The platform's transition to USDT is seen as a strategic move, with Tether planning to fund fee reductions and user incentives tied to the transition, as well as providing liquidity support to market makers. The move is expected to position USDT at the center of Drift's trading infrastructure, enabling the platform to restore user funds and resume operations.