Following a significant exploit, Drift Protocol has announced plans to relaunch using Tether's USDT as its primary settlement layer, thanks to a substantial funding package of up to $147.5 million from Tether and its partners. This deal, which includes $127.5 million from Tether and $20 million from other partners, is designed to support the recovery of user funds and reboot the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC.
The funding package combines revenue-linked credit facilities, ecosystem grants, and loans to market makers, with a portion of trading revenue and committed capital directed towards covering approximately $295 million in user losses over time. The exploit, linked to a North Korean group, resulted in losses exceeding $270 million on April 1, causing Drift's governance token, DRIFT, to lose about 70% of its value. The incident also sparked controversy surrounding Circle's response to the exploit, with critics arguing that the company could have acted more swiftly to freeze funds and prevent the attacker from transferring assets.
In contrast, Tether has demonstrated its ability to freeze assets linked to hacks or illicit activities promptly. As the largest decentralized perpetual futures exchange on Solana, with over 175,000 users and $150 billion in cumulative trading volume, Drift's transition to USDT is expected to position the stablecoin at the center of its trading infrastructure, providing a pathway for user fund restoration and operational resumption. The move also reflects the intensifying competition in the stablecoin market, where Circle's USDC has been gaining ground against Tether's long-standing dominance, with USDT still leading in terms of supply but USDC outpacing it in transaction volume in recent months.