In the aftermath of a recent exploit attributed to a North Korean group, Drift Protocol has announced plans to relaunch with Tether's USDT as its primary settlement layer, thanks to a substantial 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, aiming to facilitate user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana. Previously, Drift utilized Circle's USDC as its settlement layer.

The rescue package encompasses 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 roughly $295 million in user losses over time. This development follows a North Korea-linked group's infiltration of Drift Protocol, resulting in an exploit exceeding $270 million on April 1. Drift's governance token, DRIFT, has since lost approximately 70% of its value. The incident drew criticism towards Circle for its perceived hesitance to halt the transfer of funds after the exploit, with the attacker transferring about $232 million in USDC from Solana to Ethereum using Circle's cross-chain transfer protocol.

Circle's approach, as outlined by CEO Jeremy Allaire, is to freeze USDC wallets only upon direction from law enforcement or courts, reflecting the company's strategy to closely align with regulators and institutions. In contrast, USDT has demonstrated greater agility in freezing 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 positions the stablecoin at the core of its trading infrastructure, providing a pathway to restore user funds and resume operations. The competition among stablecoins continues to intensify, with exchanges, fintechs, and traditional financial institutions vying to control on-ramps, liquidity, and settlement layers. While USDT maintains a significant lead, Circle's USDC has been gaining traction, driven by regulatory alignment and growing institutional adoption. The new funding package will also enable Tether to support fee reductions and user incentives tied to Drift's transition to USDT, as well as extend liquidity support to designated market makers, bolstering trading depth at relaunch.