Tether Commits $127.5M to Drift Protocol Post Hack: How Will Affected Users Get Paid?
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Fifteen days ago, North Korean operatives drained $295 million from Drift Protocol in twelve minutes. Today, Drift published its first credible answer for affected users – and the company backing it is Tether.
In a recovery update published April 16, Drift announced a collaboration with Tether and other partners to address the $295 million in outstanding user losses. Tether is proposed to contribute up to $127.5 million. Additional partners will contribute up to $20 million. The structure includes a $100 million revenue-linked credit facility, an ecosystem grant, and loans to market makers.
The gap between what is committed and what is owed is still $147.5 million. Users are betting on Drift’s future revenue to close it.
Drift Protocol Recovery Token: How Affected Users Get Paid Back
Drift will issue a dedicated recovery token to every user impacted by the April 1 exploit. The token is separate from the DRIFT governance token and represents a claim on the recovery pool. Critically, it is transferable – meaning users who cannot wait for the pool to fill can sell their claim.
As stolen funds are recovered through law enforcement and blockchain forensics work, those assets will also be added to the pool.
Read More: If Smart Contracts Are Getting Safer, Why Is Crypto Still Losing $450M to Hacks?
Drift Drops USDC for USDT: The Real Message to Circle
When Drift relaunches, it will settle in USDT instead of USDC.
The timing is pointed. After the April 1 hack, Circle’s CEO cited a “moral quandary” when asked why the company did not freeze the $71 million in stolen USDC as it was bridged from Solana to Ethereum. ZachXBT publicly called out the inaction.
Now, Tether – whose own stablecoin was among the assets stolen in the hack – becomes Drift’s settlement layer and market-making backer at relaunch.
No official statement has called it a rebuke. The decision speaks for itself.
How Drift Is Rebuilding Itself
Drift is replacing its system.
Two independent audits are required before relaunch: one from Ottersec, one from Asymmetric. A new community-governed multisig will replace the existing structure, with timelocks enforced on all critical administrative actions. Durable nonces, a key vector in the April 1 attack, are being disabled for all signers. All multisig signers will operate on dedicated signing devices.
Every specific failure from April 1 is being addressed directly.
The $295 million total loss breaks down across 19 asset types. JLP alone accounted for $159 million – more than half. USDC was second at $71 million.
The insurance fund was unaffected. All insurance fund depositors’ assets remain intact and will be accessible at relaunch.