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 primary settlement layer, backed by a proposed funding package of up to $147.5 million from Tether and its partners. The funding package, which includes a revenue-linked credit facility, ecosystem grants, and loans to market makers, aims to support user recovery and reboot the platform as a USDT-based perpetual futures exchange on Solana.
The deal comprises up to $127.5 million from Tether and $20 million from other partners, with a portion of trading revenue and committed capital allocated to a recovery pool to cover approximately $295 million in user losses over time. This development comes after a North Korea-linked group infiltrated Drift Protocol, resulting in a significant exploit on April 1.
The platform's governance token, DRIFT, has since lost around 70% of its value. The incident also sparked controversy surrounding Circle's handling of the exploit, with critics arguing that the company 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 illicit activities promptly. As the largest decentralized perpetual futures exchange on Solana, Drift boasts over 175,000 users and approximately $150 billion in cumulative trading volume.
The platform's transition to USDT is expected to position Tether at the center of its trading infrastructure, providing a pathway to restore user funds and resume operations. The stablecoin market is becoming increasingly competitive, with Circle's USDC gaining share due to regulatory alignment and growing institutional use, while Tether's USDT still maintains a significant lead.
With the new funding package, Tether plans to fund fee reductions and user incentives tied to Drift's transition to USDT, as well as extend liquidity support to designated market makers to bolster trading depth at relaunch.