Following a significant exploit that resulted in the loss of over $270 million in client assets, Drift Protocol has announced a funding package of up to $147.5 million from Tether and its partners. The investment will be used to recover user funds and relaunch the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC as its settlement layer. The funding package, which includes a revenue-linked credit facility, ecosystem grants, and loans to market makers, aims to support user recovery and reboot the platform. A portion of trading revenue will be allocated to a recovery pool to cover roughly $295 million in user losses over time.
The exploit, which occurred on April 1, was carried out by a North Korea-linked group and resulted in the loss of approximately $232 million in USDC. The incident 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 or illicit activities. The funding package also includes plans for fee reductions and user incentives tied to Drift's transition to USDT, as well as liquidity support for designated market makers. The move is seen as a strategic play by Tether to expand its market share and solidify its position in the stablecoin market, which is becoming increasingly competitive.