Following a devastating exploit that resulted in the loss of over $270 million, Drift Protocol has announced a major funding package of up to $147.5 million from Tether and its partners. The funding will be utilized to recover user funds and reboot the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC as its settlement layer.
The deal comprises 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 aimed at covering user losses over time. The exploit, which was linked to a North Korea-based group, led to a significant decline in the value of Drift's governance token, DRIFT. The incident also sparked controversy surrounding Circle's handling of the situation, with some critics arguing that the company could have taken swifter action to freeze funds and prevent the attacker from transferring assets. In contrast, Tether has a history of freezing assets linked to hacks and illicit activities.
As the largest decentralized perpetual futures exchange on Solana, Drift boasts over 175,000 users and $150 billion in cumulative trading volume. The transition to USDT is seen as a strategic move, with Tether planning to provide fee reductions and user incentives to support the platform's relaunch.
The development is also expected to intensify competition in the stablecoin market, with USDT and USDC vying for dominance.