Drift to issue ‘recovery tokens’ in wake of $295m hack

Developers behind Solana-based derivatives exchange Drift proposed on Tuesday a recovery plan that would funnel protocol revenue to users who lost money in a devastating April hack.

The developers also proposed relaunching the protocol before July “a leaner, perps-native exchange with an emphasis on security.”

“The Drift team is taking considered measures to ensure that users are made whole, and that Drift restores itself as the leading perpetuals DEX on Solana,” they said in an update posted on the exchange’s website.

“The team has made internal hard decisions to restructure and operate as lean as possible, focusing entirely on recovery and relaunch.”

But various elements of the recovery plan will have to be approved by Drift tokenholders — and, if all goes according to plan, victims could wait years to break even.

On April 1, hackers were able to trick Drift administrators into approving bogus transactions. The hackers made off with crypto worth $295 million, forcing Drift to suspend trading and other activity. Blockchain analysts have since said North Korea was likely behind the hack.

Should it pass, Drift’s proposal would lead to a lengthy recovery process for users who want to be fully compensated for their losses.

Users would be issued a “recovery token” representing a claim on a "recovery pool” that would be gradually filled by Drift revenue, as well as crypto committed by Tether and other organizations that offered help after the hack. The claim would be…