Drift Protocol is moving ahead with a recovery token scheme to compensate users after the $285.4 million exploit on April 1, 2026. The hack was linked in the source material to North Korean actors and left a large number of users with unrecovered funds. Instead of using the original DRIFT token, the protocol plans to issue a separate asset designed specifically for loss accounting and repayments.
Verified losses converted into tokens at a 1:1 ratio
Under the plan, each affected wallet will receive recovery tokens based on verified losses. The conversion rule is straightforward: 1 token equals $1 of loss. A user with a $5,000 verified shortfall would receive 5,000 tokens. These tokens are structured as SPL assets on Solana, separate from the regular DRIFT token, which means they can be transferred on-chain and traded independently.
Users have three options once they receive the tokens. They can sell them for immediate liquidity, hold them while the repayment pool grows, or redeem them directly for USDT through Drift Protocol once the pool exceeds $5 million. Tokens used for redemption are burned, and the source material describes that choice as irreversible. That sets up a clear trade-off: exit early for cash, or wait for a potentially larger recovery if more capital enters the pool.
Tether commits $127.5 million as the pool gets started
The initial funding base is led by Tether’s $127.5 million commitment, which comes through a special credit facility and grants, according to the source. Other partners are adding another $20 million, bringing starting support to nearly $150 million. That capital forms the first layer of the compensation pool, which is also expected to receive a share of the exchange’s future revenue.
Drift’s approach is built around a longer payout cycle rather than a one-off distribution. The protocol plans to allocate part of its earnings to the pool every quarter, using operating revenue to reduce the remaining deficit over time. By separating the recovery token from DRIFT, the team is trying to isolate the compensation process from the protocol’s governance structure.
Liquidity, regulation, and timing remain the main risks
The plan still carries material risks for users. One is liquidity. Because the recovery token is new, trading depth on DEXes may be limited, and large sell orders could push the price down fast. Another is regulation. If authorities classify the token as a security, that could alter how it is traded or who is allowed to hold it, forcing changes to the current structure.
The time horizon may prove just as important. Covering losses close to $300 million will take more than the initial backstop, and the pace of recovery depends on future quarterly revenue after relaunch. The source says Drift plans to return in Q2 2026 with USDT as its main asset. Market response has been positive so far, with DRIFT priced at $0.03840 and up 7% over the week. Whether the recovery token can approach its full $1 value will depend on how quickly the pool grows and how long users are willing to wait.