Drift Protocol, recently targeted by a North Korean hacking group, has announced plans to relaunch using Tether's USDT as its primary settlement layer after securing a significant funding package of up to $147.5 million from Tether and other partners. This deal includes $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, replacing its previous use of Circle's USDC.
The funding package consists of 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 approximately $295 million in user losses over time. This development comes after a North Korea-linked group infiltrated Drift, resulting in losses exceeding $270 million on April 1, which led to Drift's governance token, DRIFT, losing about 70% of its value.
The exploit also sparked controversy surrounding Circle's response, with critics arguing that the company could have acted faster to freeze funds and prevent the attacker from transferring assets. In contrast, Tether has demonstrated a more agile approach to freezing funds linked to illicit activities.
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 marks a significant shift in the stablecoin landscape, where competition is intensifying among exchanges, fintechs, and traditional institutions vying for control of on-ramps, liquidity, and settlement layers in digital asset markets.