Drift Protocol, recently victimized by a North Korean exploit, has announced plans to relaunch with Tether's USDT as its primary settlement layer after securing a substantial funding package of up to $147.5 million from Tether and its partners. The deal is structured as a combination of a revenue-linked credit facility, ecosystem grants, and loans to market makers, with the primary goal of supporting user recovery and rebooting the platform as a USDT-based perpetual futures exchange on Solana. Prior to the exploit, Drift utilized Circle's stablecoin, USDC, as its settlement layer.
The rescue package aims to cover approximately $295 million in user losses over time, with a portion of trading revenue and committed capital directed towards a recovery pool. The exploit, which occurred on April 1, resulted in losses exceeding $270 million and was carried out by a North Korea-linked group posing as a quantitative trading firm. Since the incident, Drift's governance token, DRIFT, has experienced a significant decline of about 70% in value.
The funding comes as a response to the recent events and marks a significant shift in Drift's operations, with the platform transitioning to USDT and Tether providing support for fee reductions, user incentives, and liquidity provision to designated market makers. This move positions USDT at the core of Drift's trading infrastructure, providing a pathway for the platform to restore user funds and resume operations.