Tether to fund $127.5 million of Drift Protocol's user recovery

Jason Wu

·Apr 16 2026, 20:20

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Key Takeaways:

Tether has committed up to $127.5 million to a recovery fund for users of Drift Protocol, a decentralized finance platform on Solana.
The fund aims to address a vulnerability attack on April 1st that resulted in approximately $295 million in user losses.
Other partners are contributing an additional $20 million, bringing the initial recovery pool to nearly $150 million.

Drift Protocol, a major decentralized finance (DeFi) platform on Solana, will receive up to $127.5 million from stablecoin issuer Tether to help make users whole after a recent exploit.

"Tether is pleased to assist in the recovery of user funds," a spokesperson for Tether said in a statement. "We believe in supporting the ecosystems built on our stablecoins, and this contribution to Drift is a testament to that commitment."

The recovery package addresses a vulnerability attack on April 1st that drained an estimated $295 million from the protocol's users. In addition to Tether's significant contribution, other partners have pledged a combined $20 million, creating an initial recovery fund of $147.5 million to partially cover the losses.

This move sets a significant precedent for the DeFi industry, where large-scale exploits have often resulted in permanent losses for users. The involvement of a major, centralized entity like Tether in the bailout of a decentralized protocol could boost confidence in Drift's ability to recover. However, it also introduces questions about moral hazard and the potential for industry-led interventions to influence the dynamics of decentralized markets.

This article is for informational purposes only and does not constitute investment advice.