Following a significant exploit linked to North Korea, Drift Protocol has announced plans to relaunch with Tether's USDT as its primary settlement layer, backed by a substantial funding package of up to $147.5 million 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 deal comprises a revenue-linked credit facility, ecosystem grants, and loans to market makers, with a portion of trading revenue allocated to a recovery pool aimed at covering approximately $295 million in user losses over time. This development comes after a North Korea-linked group infiltrated Drift Protocol, resulting in losses of over $270 million on April 1.
The incident led to criticism of Circle for not halting the transfer of funds, with some arguing that the company could have moved faster to freeze assets and prevent the attacker from transferring approximately $232 million in USDC from Solana to Ethereum. In contrast, Tether has demonstrated a willingness to freeze funds linked to 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 is seen as a strategic move in the intensifying competition among stablecoins.
With USDT still leading the market, despite USDC's recent gains, Tether's funding package for Drift also includes plans to reduce fees and provide user incentives, while extending liquidity support to market makers.