TLDR
- Drift Protocol recovery funding includes $127.5M from Tether and $20M from partners to restore user balances.
- The platform will relaunch using USDT, replacing USDC as its main settlement layer after the exploit.
- A revenue-linked model will repay nearly $295M in user losses through trading fees and committed capital.
- On April 1, attackers infiltrated Drift for months before executing the exploit, which drained over $270M.
Drift Protocol has secured a $147.5 million recovery package following its April 1 exploit, aiming to restore user funds and relaunch operations. The funding includes major backing from Tether alongside partner contributions tied to a revenue-linked repayment structure.
Recovery Plan Backed by Tether and Partners
A post shared by SolanaFloor on X reported the funding breakthrough after weeks of uncertainty around user losses. The package includes up to $127.5 million from Tether and an additional $20 million from ecosystem partners.
The capital structure combines loans, grants, and a revenue-linked credit facility. Drift plans to channel part of its future trading revenue into a recovery pool. This pool is designed to gradually repay nearly $295 million owed to affected users.
The exploit, which occurred on April 1, drained more than $270 million in client assets. Reports indicate that attackers posed as a quantitative trading firm for months before executing the breach. The group has been linked to North Korea, according to available disclosures.
As part of the recovery effort, Drift is also working to rebuild trust with its user base. Its governance token has dropped roughly 70% since the incident. The funding package is structured to stabilize operations while enabling a phased return of user funds.
The relaunch strategy includes incentives for users and liquidity providers. Tether has committed additional support to reduce trading fees and improve market depth. These measures are expected to support activity once the platform resumes.
Shift to USDT Reshapes Platform Strategy
Drift will relaunch as a USDT-based perpetual futures exchange on Solana. The protocol previously relied on USDC as its settlement layer. This transition marks a shift in how the platform manages liquidity and risk.
The exploit drew attention to how stablecoin issuers respond during crises. The attacker reportedly moved $232 million in USDC across chains shortly after the breach. Critics argued that faster intervention could have slowed the asset transfers.
Circle maintained that wallet freezes require legal authorization. Its leadership stated that actions are only taken under law enforcement or court direction. This approach aligns with its broader regulatory stance.
In contrast, Tether has taken a more active role in freezing assets linked to illicit activity. The company has previously blocked funds tied to hacks in real time. This difference has influenced Drift’s decision to adopt USDT as its core settlement asset.
Drift’s updated model places USDT at the center of its trading infrastructure. The protocol also plans to provide liquidity support to designated market makers. These steps aim to ensure smoother trading conditions after relaunch.
The platform remains one of the largest decentralized perpetual exchanges on Solana. It serves over 175,000 users and has processed around $150 billion in trading volume. The recovery plan is expected to guide its return to active operations.
