Tether's $150 Million Bailout of Drift Protocol Leaves $145 Million Uncovered

Users of Drift Protocol face a $145 million shortfall in the recovery of $295 million in outstanding losses. The recovery is led by a $150 million support package provided by Tether and other partners. Tether contributed $127.5 million, while other partners provided $20 million.

This funding is paired with a $100 million revenue-linked credit facility to facilitate the platform's relaunch. The relaunch requires two independent audits and a migration from USDC to USDT. USDT will serve as the settlement asset for the relaunched protocol, a pivot following Circle's refusal to freeze stolen USDC during the attack. Circle stated it only freezes assets based on legal orders.

The shortfall occurs after an April 1 exploit where North Korean state-linked actors used a malicious TestFlight app and VSCode vulnerability to compromise devices over six months. Attackers used Solana's durable nonces feature to manipulate multisig approvals to drain between $270 million and $285 million from Drift's vaults. Drift's total value locked fell from $550 million to { "//": "Wait, the source says $230 million, let me ensure the body follows the chain precisely." } $230 million.

Despite a recent 19.66% surge in the DRIFT token to approximately $0.0486, the protocol's $29.9 million market value remains trivial compared to its $295 million liability pool. Users will receive transferable recovery tokens whose value will be determined by platform revenue and secondary market pricing.