The decentralized exchange platform Drift Protocol has just announced a large-scale recovery plan following the devastating DeFi market hack in early April, and confirmed securing a $127.5 million funding agreement from stablecoin giant Tether. This move not only aims to compensate users for losses but also marks a significant strategic shift as Drift decides to move away from USDC and switch to using USDT as its primary payment layer in its upcoming relaunch.
According to the latest update, the overall recovery package includes approximately $100 million in revenue-linked credit lines, ecosystem grants, and market maker loans, along with approximately $20 million in support from other partners. All of this Capital will be channeled into a separate “recovery fund” to gradually address the estimated user losses of nearly $295 million over time, as exchange revenue increases and stolen assets are potentially recovered.
To implement the reimbursement mechanism, Drift plans to issue a separate recovery Token for victims of the attack. This Token is completely separate from the current DRIFT Governance Token and represents the right to claim compensation from the recovery fund. Notably, this Token is transferable, giving users liquidation before the reimbursement process is complete, instead of having to wait for years as in previous DeFi hacks.
Alongside its compensation plan, Drift confirmed it will change its core operational structure by switching its payment layer from USDC to USDT. This decision comes after a public dispute between blockchain investigator ZachXBT and the USDC issuer, Circle , regarding the freezing of assets related to the hack. Circle CEO Jeremy Allaire stated that intervening to freeze assets was a “complex ethical situation,” highlighting the difficulty in balancing decentralization and user protection. Following this controversy, Drift decided to deepen its partnership with Tether – an Capital known for its ability to support liquidation and respond quickly to major crypto market incidents.
The April 1st attack is XEM one of the most serious incidents in the Solana DeFi ecosystem this year. Initially, Drift reported losses of at least $200 million, later adjusted to around $280 million. Subsequent analysis revealed it to be a sophisticated takeover, part of a months-long scam campaign, and showed signs of involvement from hacking groups suspected of having ties to North Korea – a scenario increasingly familiar in recent large-scale DeFi hacks.
Detailed reports reveal that nearly $296 million worth of assets were withdrawn from the platform across various Token , with the majority coming from the JLP liquidation pool. Drift is currently working with law enforcement and blockchain analytics firms to trace the funds, with a commitment that any recovered assets will be directly transferred to a recovery fund to be returned to users.
