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, supported by a proposed funding package of up to $147.5 million from Tether and its partners. The funding package, which includes up to $127.5 million from Tether and $20 million from other partners, is designed to facilitate user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana. Previously, the platform utilized Circle's USDC as its settlement layer. 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 approximately $295 million in user losses over time.
The exploit, which occurred on April 1, was carried out by a North Korea-linked group that had infiltrated Drift Protocol by posing as a quantitative trading firm for about six months. The incident has led to a significant decline in the value of Drift's governance token, DRIFT, which has lost around 70% of its value since the exploit. The funding package also includes plans for Tether to support fee reductions and user incentives tied to Drift's transition to USDT, as well as extending liquidity support to designated market makers to enhance trading depth at relaunch. This development marks a significant shift in the stablecoin market, with USDT poised to play a central role in Drift's trading infrastructure, providing a pathway for the platform to restore user funds and resume operations.