Following a significant exploit linked to North Korea, Drift Protocol is set 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. This deal, announced on Thursday, comprises $127.5 million from Tether and $20 million from other partners, aiming to support user recovery and reboot the platform. The exploit, which occurred on April 1, resulted in losses of over $270 million and led to a 70% decline in the value of Drift's governance token, DRIFT.
Previously, the platform relied on Circle's USDC as its settlement layer. The new funding 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 user losses over time. The decision to switch to USDT comes after Circle faced criticism for not halting the transfer of exploited funds. In contrast, USDT has a history of freezing assets linked to hacks and 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 is expected to position the stablecoin at the center of its trading infrastructure, providing a pathway to restore user funds and resume operations.