Drift Protocol, a victim of the recent North Korea breach, said on Thursday it plans to relaunch Tether’s USDT as its settlement layer after securing a proposed financing package of up to $147.5 million from stablecoin issuers and partners.
The deal, which includes up to $127.5 million from Tether and $20 million from other partners, is intended to support user recovery following Drift’s April 1 exploit and relaunch 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 package combines revenue-linked credit facilities, ecosystem grants and loans to market makers. A portion of the trading revenue, as well as committed capital, will go toward a recovery pool designed to recoup 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 firm for about six months before carrying out an attack worth more than $270 million on April 1. Drift’s governance token, DRIFT, has lost approximately 70% of its value since the attack.
Circle has been criticized by the cryptocurrency community for its seeming reluctance to stop fund transfers following the breach. The attacker used Circle’s cross-chain transfer protocol to transfer approximately $232 million in USDC from Solana to Ethereum. Some critics, including blockchain investigator ZachXBT, said Circle could have blacklisted wallets and frozen funds more quickly to prevent (or at least slow down) attackers from transferring assets.
However, due to legal risks, Circle’s did not take any such action.
Its CEO Jeremy Allaire later said that his company would only freeze USDC wallets if directed by law enforcement or the courts, and not in real time during the hack. The approach reflects Circle’s wider strategy of working closely with regulators and agencies.
Meanwhile, its rival USDT is more flexible in freezing funds. The stablecoin issuer has previously frozen assets linked to hackers or other illegal activities on several occasions.
Drift is the largest decentralized perpetual futures exchange on Solana, with more than 175,000 users and a cumulative trading volume of approximately US$150 billion. Founded in 2021, it offers perpetual contracts, spot trading, lending and cross-margin trading.
Stablecoin war
Competition for stablecoins is intensifying as exchanges, fintech companies and traditional financial institutions compete to control the on-ramp, liquidity and settlement layers that underpin digital asset markets.
Circle’s USDC has been steadily chipping away at Tether’s long-standing dominance of the stablecoin market, gaining share amid growing regulatory harmonization and institutional use.
Circle’s trading volume has surpassed Tether in recent months as it has gained market share, although USDT still leads by a wide margin, with a supply of about $185.5 billion, compared with USDC’s supply of about $78.6 billion, according to CoinDesk.
Through the new financing package, Tether also plans to fund fee reductions and user incentives related to Drift’s transition to USDT, while providing liquidity support to designated market makers to enhance trading depth upon relaunch.
Drift said the move puts USDT at the center of its trading infrastructure while providing a way to recover user funds and resume operations.
Read more: How a Solana feature designed for convenience allowed attackers to steal more than $270 million from Drift
