Following a recent exploit, Drift Protocol has announced plans to relaunch with Tether's USDT as its primary settlement layer, thanks to a proposed funding package of up to $147.5 million from Tether and its partners. The agreement comprises up to $127.5 million from Tether and $20 million from other partners, aiming to support user recovery and reboot 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 allocated to a recovery pool to cover roughly $295 million in user losses over time. The funding comes after a North Korea-linked group infiltrated Drift Protocol, resulting in losses exceeding $270 million on April 1. Drift's governance token, DRIFT, has since lost approximately 70% of its value. The incident sparked criticism towards Circle for not halting the money transfer, with the attacker moving around $232 million in USDC from Solana to Ethereum using Circle's cross-chain transfer protocol.
In response, Circle's CEO, Jeremy Allaire, stated that the company only freezes USDC wallets when directed by law enforcement or courts, citing legal risks. 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 approximately $150 billion in cumulative trading volume. The platform's transition to USDT is expected to position USDT at the center of its trading infrastructure, providing a pathway to restore user funds and resume operations.