Drift Protocol’s $295M Recovery Plan: 3.8M in Stablecoins & 10% Whitehat Bounty

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Drift Protocol Releases Recovery Plan After $295 Million Exploit—Key Details

Drift Protocol has revealed a plan to compensate users who lost funds in the security breach that occurred in April. The incident, which impacted the decentralized exchange (DEX), resulted in losses totaling approximately $295 million.

Drift Protocol’s $295M Recovery Plan

Drift Protocol is creating a system of recovery tokens to reimburse users affected by the April 1st hack. Each impacted wallet will receive tokens representing the amount of their confirmed losses, giving them a corresponding share of funds from a dedicated recovery pool.

Each recovery token represents $1 of confirmed losses. These losses are calculated by examining what’s left in the protocol and any outstanding positions, as detailed in a specific section of this post.

Drift Protocol plans to use its remaining funds to start a recovery pool. These funds will be converted into stablecoins to maintain their value, currently estimated at around $3.8 million.

The process will finish with a final USDT amount being announced once all token exchanges are done. Drift explained that after the initial funding, there are three ongoing methods to increase the pool’s size until it covers the total losses from the exploit.

The Planned Q2 Relaunch

Drift Protocol confirmed that the recent security issue didn’t impact its Insurance Fund. Before the attack, the fund held around $20 million worth of assets, and those funds remain secure.

The release of funds from the Insurance Fund requires a formal proposal and a vote by the DAO community. We encourage everyone to participate in the governance process to decide if these funds should be distributed to depositors or used to bolster the recovery pool.

Drift also provided an update on its recovery from the recent incident, explaining that cybersecurity experts from ZeroShadow and Mandiant are helping with the investigation and restoration process.

At the same time, the project announced a reward program with Bybit and others. This program offers a 10% reward for anyone who helps recover lost assets. The project has made the program public to encourage participation from ethical hackers, security experts, and the wider community.

Drift Protocol plans to relaunch in the second quarter of this year as a simpler, more focused exchange specifically for perpetual futures, with a strong commitment to security.

The company explained that the security improvements in its plan are a direct result of vulnerabilities revealed by the attack on April 1st. They also emphasized that certain important decisions still need to be formally approved through a proposal and vote by the DAO before they can be implemented.

Featured image created with OpenArt, chart from TradingView.com 

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2026-05-06 10:59