Following a significant exploit linked to North Korea, Drift Protocol is set to relaunch with Tether's USDT as its primary settlement layer, backed by a $147.5 million funding package from Tether and its partners. The package, which includes $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, replacing Circle's USDC. The funding combines 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 approximately $295 million in user losses over time. This development comes after Drift suffered an exploit of over $270 million on April 1, resulting in a 70% decline in the value of its governance token, DRIFT.
The incident sparked criticism towards Circle for not halting the transfer of exploited funds, citing legal risks. In contrast, Tether has a history of freezing assets linked to hacks. 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 seen as a strategic move in the intensifying competition among stablecoin issuers. With USDT still dominating the market, Circle's USDC has been gaining ground through regulatory alignment and institutional adoption.
The new funding package will also support fee reductions, user incentives, and liquidity provision to market makers, positioning USDT at the core of Drift's trading infrastructure and paving the way for the restoration of user funds and the resumption of operations.