Drift Protocol is relaunching as Velocity Dex with a Tether credit line

Drift Protocol announced that it has rebranded to Velocity DEX as part of its relaunch efforts after the Solana-based perpetual futures exchange lost more than $280 million on April 1 attributed to North Korea’s Lazarus Group.

The company’s rebranding is backed by $127.5 million Line of credit from Tether. As part of the agreement, USDT will replace USDC on the platform.

Drift Protocol has been rebranded as Velocity Dex

Drift protocol Announced a rebranding on X using the project’s official account, which now operates under the name @VelocityDEX. “Our new name reflects the new and improved platform we are building,” the team wrote.

The original Drift platform has been offline since April 1, when attackers compromised its multi-signature wallets and drained assets across 31 transactions in approximately 12 minutes. Blockchain investigator ZachXBT and security companies Elliptic and TRM Labs Link attack To the Lazarus Group, the same North Korean cyber unit behind the $1.4 billion Bybit hack.

Eleven DeFi protocols that use Drift for yield strategies or vaults had funds stolen or frozen, including Pyra, which lost all of its deposited funds, and DeFi Carrot, which had half of its TVL wiped out.

The company struck a deal with Tether, announced in April, allocating approximately $127.5 million to support the relaunch. As part of the agreement, the exchange is converting its primary stablecoin from Circle’s USDC to Tether’s USDT, a move that affects its 128,000 users and more than 35 ecosystem teams, according to Cryptopolitan. Previous coverage Of the deal.

One of the first to defend the new brand after users started criticizing it was the engineer of the Velocity DEX protocol, which runs Male @redacted_noah handle The Tether deal is not a bailout. According to the handle, “Tether wants to run the best exchange on USDT,” but stopped short of going into detail because, by his own admission, he did not “know the actual terms of the deal.”

Can users still expect to receive compensation?

Affected users are being refunded through a token-based compensation system. Each affected wallet received recovery codes representing $1 of the verified loss. Users can cash out their funds only when the total redemption reaches $5 million. The pool started with $3.8 million of the protocol’s remaining assets.

The pool is expected to grow through quarterly exchange revenue, Tether commitment, and up to $20 million from strategic partners.

Users who redeem early only get a pro rata share of what the pool holds at that point and forfeit their remaining claim. That structure It sparked sharp criticism, with one user describing the DAO’s related vote on reallocating the insurance fund’s assets as an “effective attempt at money laundering.”

Data from DefiLlama It shows that Drift’s total value is locked at around $217 million, down from more than $550 million before the exploit. The DRIFT token is trading near $0.017, near its all-time low. Perp volume and DEX volume have been at zero since the platform went offline, but the company’s annual fee revenue is around $35 million based on past activity.