Following a recent exploit that compromised over $270 million in client assets, Drift Protocol has announced plans to relaunch its platform utilizing Tether's USDT as its settlement layer, backed by a proposed $147.5 million funding package from Tether and partners. The funding is structured 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, and will be used to facilitate a revenue-linked credit facility, ecosystem grants, and loans to market makers.
A portion of trading revenue will be allocated to a recovery pool to cover roughly $295 million in user losses over time. The exploit, linked to a North Korea-based group, occurred on April 1 and resulted in the loss of approximately $232 million in USDC, which was transferred from Solana to Ethereum using Circle's cross-chain transfer protocol. Circle faced criticism 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 demonstrated its ability to freeze assets linked to hacks or illicit activities in the past. The transition to USDT is seen as a strategic move, with Tether planning to fund fee reductions and user incentives tied to Drift's transition, as well as providing liquidity support to designated market makers.
The move is expected to position USDT at the center of Drift's trading infrastructure, while providing a pathway to restore user funds and resume operations.