In the aftermath of a devastating North Korean-led exploit, Drift Protocol has announced plans to relaunch with Tether's USDT as its primary settlement layer, thanks to a proposed $147.5 million funding package from Tether and its partners. The funding is structured to facilitate user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana, replacing Circle's USDC. The rescue package 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 roughly $295 million in user losses over time. This development comes on the heels of a North Korea-linked group infiltrating Drift Protocol, resulting in losses exceeding $270 million on April 1.
The incident led to a 70% decline in the value of Drift's governance token, DRIFT. The exploit also sparked criticism towards Circle for its handling of the situation, with some arguing that the company could have acted faster to freeze funds and prevent the attacker from transferring assets.
In contrast, Tether has a history of swiftly freezing assets linked to hacks or 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 platform's transition to USDT is set to position Tether at the center of its trading infrastructure, providing a pathway to restore user funds and resume operations.