Solana-based perpetual futures exchange Drift Protocol announced on July 1 that it is rebranding as Velocity DEX, part of the platform's relaunch plan after being offline for over three months following an attack on April 1. The attacker stole over $280 million in assets through 31 transactions in about 12 minutes.
Lazarus Group Attack: $280 Million Stolen and Affected Protocols
On April 1, 2026, attackers breached Drift Protocol's multi-signature wallet, stealing over $280 million in assets through 31 transactions in about 12 minutes. ZachXBT, Elliptic, and TRM Labs all attributed the attack to North Korea's Lazarus Group, linking it to the Bybit $1.4 billion theft. A total of 11 DeFi protocols using Drift for yield or vault strategies were affected, including:
· Pyra: All deposited funds completely lost
· DeFi Carrot: Half of TVL wiped out
· The remaining 9 DeFi protocols had funds stolen or frozen
Tether Credit Agreement: USDC to USDT Switch and $127.5 Million Facility Disclosed Terms
Tether and Drift Protocol signed an agreement in April 2026, with Tether providing approximately $127.5 million in credit to support the platform's relaunch, on condition that the platform switches its core stablecoin from Circle's USDC to Tether's USDT.
Protocol engineer @redacted_noah stated on X, "Tether aims to build a top-tier exchange based on USDT," while adding that he is not aware of the specific financial terms of the deal. Detailed terms have not been fully disclosed by the platform's official sources.
Compensation Plan for Affected Users: Token Mechanism, $5 Million Threshold, and Current Fund Pool Composition
Velocity DEX uses a compensation token mechanism for affected users: each affected wallet receives compensation tokens representing every $1 of verified loss, which can only be redeemed after the compensation fund pool reaches $5 million. The pool currently consists of $3.8 million from the protocol's remaining assets; according to Velocity DEX's announcement, future sources include quarterly exchange revenue, Tether's commitment, and up to $20 million in investment from strategic partners. Users who redeem early will receive a proportional share of the pool at that time and forfeit the remainder.
The DRIFT token currently trades at approximately $0.017, near its historical low; the platform has had zero DEX trading volume since going offline, and its annual fee revenue before the exploit was about $35 million.
Frequently Asked Questions
Why did Drift Protocol rebrand as Velocity DEX?
According to an official statement from the Velocity DEX team on X, the new name reflects the "completely upgraded platform" they are building. The rebranding is part of the relaunch plan after the Lazarus Group attack on April 1, 2026, which resulted in losses of over $280 million and prolonged downtime. The new official account is @VelocityDEX.
Under what conditions can affected users redeem their compensation tokens?
According to the Velocity DEX announcement, redemption is only possible when the compensation fund pool reaches $5 million; the pool currently consists of $3.8 million. Users who redeem early will receive a proportional share of the pool at that time and forfeit the remainder.
What are the main disclosed terms of the Tether and Velocity DEX agreement?
According to disclosed information, Tether provides approximately $127.5 million in credit, on condition that the platform switches its core stablecoin from USDC to USDT, affecting 128,000 users and over 35 ecosystem teams; detailed financial terms have not been fully disclosed by official sources.
