Following a significant exploit that resulted in the loss of over $270 million in client assets, Drift Protocol has announced plans to relaunch with Tether's USDT as its settlement layer, after securing a funding package of up to $147.5 million from Tether and its partners. The deal comprises $127.5 million from Tether and $20 million from other partners, structured as a revenue-linked credit facility, ecosystem grants, and loans to market makers, with the aim of supporting user recovery and rebooting the platform.
A portion of trading revenue will be allocated to a recovery pool to cover approximately $295 million in user losses over time. The exploit, which occurred on April 1, was attributed to a North Korea-linked group that had infiltrated Drift Protocol by posing as a quantitative trading firm for about six months.
The incident led to a 70% decline in the value of Drift's governance token, DRIFT. Circle, the issuer of USDC, faced criticism for its handling of the exploit, with some arguing that it could have acted faster to freeze funds and prevent the attacker from transferring assets. In contrast, Tether has demonstrated its ability to freeze funds linked to hacks or 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, while providing a pathway to restore user funds and resume operations.