Drift Protocol Gets $147.5M From Tether to Relaunch After Hack

Drift Protocol, the Solana-based exchange that lost around ~$285–295 million in a hack last week, announced a recovery plan, this week. Tether is putting up ~$127.5 million, other partners are adding ~$20 million, and the total package is around ~$147.5.

Nice.

The money isn't a direct bailout though, it'll work like this. A portion of Drift's future trading revenue will go into a recovery pool. That pool will cover the roughly $295 million in user losses. The rest of the package includes ecosystem grants and loans to market makers, and affected users will get special recovery tokens. Those tokens represent a claim on the recovery pool. So they'll get paid back over time as Drift earns revenue. Not immediately, eventually.

The hackers spent six months posing as a legitimate trading firm, building trust, and eventually tricking Drift's Security Council members into signing malicious transactions. The exploit led to a 40–50% token drop.

As part of the new strategy, Drift is replacing Circle's USDC with Tether's USDT as its main settlement token. People were upset with Circle after the hack because they didn't freeze the stolen money. The attacker moved up to $232 million of USDC from Solana to Ethereum using Circle's own bridge tool over six hours, and Circle never blocked it. Tether, on the other hand, has frozen assets linked to hacks before. So Drift is switching stablecoin issuers.

Drift plans to relaunch after two independent security audits by Ottersec and Asymmetric (audit firms). Once they do, the protocol will have a few new safeguards. A community-managed multisignature system, meaning no single person can make changes alone. Time locks for critical actions, so important updates take effect after a delay, giving people time to react. And real-time alerts, so users know immediately if something suspicious happens. It should work this time.