Following a significant exploit, Drift Protocol has announced plans to relaunch with Tether's USDT as its primary settlement layer, backed by a substantial funding package of up to $147.5 million from Tether and its partners. The deal comprises $127.5 million from Tether and $20 million from other partners, aimed at supporting user recovery and rebooting 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 includes 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 to cover approximately $295 million in user losses over time. The funding comes after a North Korea-linked group infiltrated Drift Protocol, resulting in an exploit that exceeded $270 million on April 1.
Drift's governance token, DRIFT, has since lost around 70% of its value. The incident drew criticism towards Circle for its perceived slow response in halting the money transfer, with the attacker moving approximately $232 million in USDC from Solana to Ethereum using Circle's cross-chain transfer protocol. In contrast, USDT has demonstrated a more agile approach to freezing funds linked to hacks or illicit activities. As the largest decentralized perpetual futures exchange on Solana, Drift boasts over 175,000 users and roughly $150 billion in cumulative trading volume.
The platform's transition to USDT is set to position the stablecoin at the center of its trading infrastructure, providing a pathway to restore user funds and resume operations. The move also reflects the intensifying competition in the stablecoin market, with Circle's USDC gaining share and Tether's USDT maintaining its lead.
With the new funding package, Tether plans to fund fee reductions and user incentives tied to Drift's transition to USDT, while extending liquidity support to designated market makers to bolster trading depth at relaunch.