Following a significant exploit that resulted in the loss of over $270 million in client assets, Drift Protocol has announced plans to relaunch with Tether's USDT as its new settlement layer, after securing a substantial funding package of up to $147.5 million from Tether and its partners. The proposed deal comprises up to $127.5 million from Tether and $20 million from other partners, with the primary objective of supporting user recovery and rebooting the platform as a USDT-based perpetual futures exchange on Solana.
Previously, the platform utilized Circle's stablecoin, USDC, as its settlement layer. The rescue package encompasses 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 aimed at covering roughly $295 million in user losses over time. This development comes after a North Korea-linked group infiltrated Drift Protocol, resulting in an exploit of over $270 million on April 1.
Drift's governance token, DRIFT, has since lost approximately 70% of its value. The funding package is expected to facilitate the transition to USDT, with Tether planning to fund fee reductions and user incentives tied to Drift's transition, as well as extending liquidity support to designated market makers to enhance trading depth at relaunch. This strategic move positions USDT at the core of Drift's trading infrastructure, providing a pathway to restore user funds and resume operations.