Tether backs Drift recovery with $127.5M as platform shifts from USDC to USDT

Tether has stepped in to support the recovery and relaunch of Drift Protocol following its 1 April exploit. The stablecoin company is committing up to $127.5 million as part of a broader recovery plan valued at approximately $150 million.

Alongside the funding, Drift plans to transition its settlement infrastructure from USDC to USDT as it prepares to resume operations. This marks a notable shift in how the platform will handle liquidity and user activity post-exploit.

Recovery plan links funding to platform activity

According to the announcement, the recovery framework combines capital support with a revenue-linked model designed to restore user balances over time. 

Rather than relying solely on upfront funding, the plan ties recovery to ongoing trading activity as the platform returns to normal operations.

Under the structure, exchange revenue will be used directly to reimburse affected users, while additional funding will be deployed progressively based on platform performance.

The approach suggests that full recovery is not immediate, but contingent on Drift’s ability to relaunch and sustain trading activity in the months ahead.

Shift to USDT reshapes settlement layer

As part of the relaunch, Drift will transition its primary settlement asset from USDC to USDT, integrating the stablecoin across its trading infrastructure on Solana.

This positions USDT as the central settlement layer on one of Solana’s larger perpetual trading venues.

The transition comes at a time when stablecoin infrastructure is facing increased scrutiny in exploit scenarios. 

Recent reports have raised questions about how quickly issuers can respond to illicit fund flows, particularly in cross-chain environments. 

While Drift has not linked the shift to any specific factor, the move underscores the growing importance of liquidity access and issuer involvement during recovery events.

Relaunch follows April exploit

Drift halted operations on 1 April after confirming an active exploit, with early estimates placing losses at approximately $285 million. At the time, the protocol said it was working with partners to contain the incident and trace funds.

The latest update signals progress toward relaunch, though no firm timeline has been provided for a full return to normal operations.

Final Summary

• Tether has committed up to $127.5 million as part of a $150 million recovery plan to support Drift’s relaunch following its $285 million exploit.
• Drift will resume operations with a revenue-linked recovery model and a shift from USDC to USDT, placing the stablecoin at the center of its post-exploit infrastructure.