Drift Protocol, victim of a recent North Korean exploit, plans to relaunch with Tether’s USDT as its settlement layer after securing a proposed funding package of up to $147.5 million from the stablecoin’s issuer and its partners, the companies said Thursday.
The deal includes up to $127.5 million from Tether and $20 million from the other partners, structured to support user recovery following the April 1 Drift exploit and to restart the platform as a USDT-based perpetual futures exchange on Solana. Previously, the platform used Circle’s USDC stablecoin as a settlement layer.
The rescue package combines a revenue-linked line of credit, ecosystem grants and loans to market makers. A portion of the business revenue, along with committed capital, will be directed to a recovery fund intended to cover approximately $295 million in user losses over time.
The funding comes after a group linked to North Korea infiltrated Drift Protocol, posing as a quantitative trading firm for about six months before carrying out an exploit that amounted to more than $270 million on April 1. Drift’s governance token, DRIFT, has lost around 70% of its value since the exploit.
Circle was criticized by the crypto community for its apparent unwillingness to stop money transfers after the exploit. The attacker moved around $232 million in USDC from Solana to Ethereum using Circle’s cross-chain transfer protocol. Some critics, including blockchain researcher ZachXBT, said Circle could have moved faster to blacklist wallets and freeze funds to prevent (or at least slow) the attacker from moving assets.
However, Circle’s did not take such actions due to legal risks.
Its CEO, Jeremy Allaire, later said that his company freezes USDC wallets only when ordered to do so by authorities or courts, not in real time during attacks. The approach reflects Circle’s broader strategy of aligning closely with regulators and institutions.
Meanwhile, its rival, USDT, is more agile when it comes to freezing funds. The stablecoin issuer has repeatedly frozen assets linked to hacks or other illicit activities before.
Drift is Solana’s largest decentralized perpetual futures marketplace, with over 175,000 users and approximately $150 billion in cumulative trading volume. Founded in 2021, it offers perpetual equity, spot trading, lending, borrowing, and cross-margin trading.
Stablecoin war
Competition in stablecoins is intensifying as exchanges, fintechs and traditional financial institutions compete to control the access routes, liquidity and settlement layers that underpin digital asset markets.
Circle’s USDC has been steadily undermining Tether’s long-standing dominance in the stablecoin market, gaining share thanks to regulatory alignment and growing institutional use.
While USDT still leads by a wide margin, according to data from CoinDesk, with about $185.5 billion in supply versus about $78.6 billion for USDC, Circle’s trading volume has surpassed that of Tether in recent months as its market share expanded.
With the new funding package, Tether also plans to fund fee reductions and user incentives tied to Drift’s transition to USDT, while also extending liquidity support to designated market makers to bolster trading depth on the relaunch.
Drift said the move positions USDT at the center of its trading infrastructure while providing an avenue to restore user funds and resume operations.
Read more: How a Solana feature designed for convenience allowed attackers to drain more than $270 million from Drift
