Drift Protocol, the victim of a recent North Korean exploit, plans to relaunch with Tether’s USDT as its settlement layer after securing proposed funding of up to $147.5 million from the stablecoin issuer and its partners, the companies announced Thursday.
The deal includes up to $127.5 million from Tether and $20 million from other partners, structured to support user recovery from Drift’s April 1 exploit and to restart the platform as a USDT-based perpetual futures exchange on Solana. Previously, the platform used Circle’s stablecoin USDC as its settlement layer.
The rescue plan combines a revenue-linked credit facility, ecosystem grants and loans to market makers. A portion of commercial revenue, along with committed capital, will be directed to a recovery pool aimed at covering approximately $295 million in user losses over time.
The funding comes after a North Korea-linked group infiltrated Drift Protocol, posing as a quantitative trading company for about six months before pulling off a more than $270 million exploit on April 1. Drift’s governance token, DRIFT, has lost approximately 70% of its value since the exploit.
Circle was criticized by the crypto community for its apparent reluctance to halt money transfer after the exploit. The attacker transferred approximately $232 million in USDC from Solana to Ethereum using Circle’s cross-chain transfer protocol. Some critics, including blockchain investigator ZachXBT, said Circle could have acted more quickly to blacklist the wallets and freeze the funds to prevent (or at least slow down) the attacker from moving the assets.
However, Circle’s has not taken such steps due to legal risks.
Its CEO, Jeremy Allaire, later said that his company freezes USDC wallets only on orders from law enforcement or courts, not in real time during hacks. This approach reflects Circle’s broader strategy to align closely with regulators and institutions.
Its rival, USDT, is more adept at freezing funds. The stablecoin issuer has already repeatedly frozen assets linked to hacks or other illicit activities.
Drift is the largest decentralized, perpetual futures exchange on Solana, with over 175,000 users and a cumulative trading volume of approximately $150 billion. Founded in 2021, it offers perpetual, spot, lending, borrowing, and cross-margin trading.
Stablecoin war
Competition in stablecoins is intensifying as exchanges, fintechs and traditional financial institutions race to control the on-ramps, liquidity and settlement layers that underpin digital asset markets.
Circle’s USDC has gradually chipped away at Tether’s long-standing dominance in the stablecoin market, gaining share through regulatory alignment and growing institutional usage.
Although USDT is still well ahead, according to CoinDesk data, with about $185.5 billion in supply compared to USDC’s roughly $78.6 billion, Circle’s trading volume has outpaced Tether’s in recent months as its market share has grown.
With the new funding plan, Tether also plans to fund fee reductions and user incentives related to Drift’s transition to USDT, while extending liquidity support to designated market makers to bolster trading depth upon relaunch.
Drift said the move positions USDT at the center of its business infrastructure while providing a path to restore user funds and resume operations.
Learn more: How a Solana feature designed for convenience allowed attackers to drain more than $270 million from Drift
