Drift Protocol on Tuesday unveiled a formal recovery plan for users hit by the April 1 exploit that drained roughly $295 million in user funds from the lending DEX.
At the core of the plan is a recovery token system: every wallet affected by the exploit will receive recovery tokens equal to its verified loss, with each token representing $1 of verified loss and carrying a proportional claim on the recovery pool. Drift says verified loss figures will be calculated using a methodology that accounts for the protocol’s remaining balances and open positions (details are in the protocol’s post).
Key elements of the recovery plan
- Initial seeding: Drift will seed the recovery pool with the protocol’s remaining assets. Those assets will be converted to stablecoin to lock in notional value; the current estimate of remaining assets is roughly $3.8 million. The final USDT figure will be published once all swaps are complete.
- Growth mechanisms: After seeding, the pool will be expanded through three ongoing streams designed to grow it until it matches the total exploit losses. (Drift’s announcement outlines how these streams will work.)
- Insurance Fund: Drift says its Insurance Fund was not impacted by the exploit and held about $20 million in notional value before the attack. Any decision to release funds from the Insurance Fund requires a governance proposal and a DAO vote — Drift is inviting governance participation to decide whether those funds should go to depositors or be added to the recovery pool.
- Recovery operations and incentives: The protocol is working with cybersecurity forensics and intelligence partners ZeroShadow and Mandiant to pursue asset recovery. In parallel, Drift and partners including Bybit have launched a public bounty program offering a 10% reward on any successfully recovered assets to encourage whitehat hackers, researchers, and the wider community to help.
- Relaunch timeline and security: Drift aims to relaunch in Q2 as a “leaner, perps-native exchange” with a heightened focus on security. The security changes in the plan are presented as direct responses to vulnerabilities exposed by the April 1 attack. Drift also noted that several major steps will need governance approval via DAO proposals and votes before they can be finalized.
The announcement seeks to balance immediate restitution steps (recovery tokens and seed funding) with longer-term measures (recovery operations, bounties, governance-led decisions, and a secure relaunch). Drift promised further updates — including the final USDT conversion amount — as swaps and recovery efforts progress.
Featured image created with OpenArt; chart from TradingView.com.
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