Drift Protocol announced that after the relaunch, users of the Insurance Fund will once again be able to withdraw their funds. However, almost no one in the community is reacting calmly to this news anymore.
It has been about seven weeks since the $280 million hack, and frustration around Drift continues to grow. After the attack, the platform on Solana essentially came to a halt, and since then, users have been constantly arguing with the team about the project’s recovery.
The hack itself is linked to a group believed to be North Korean hackers. But what angers people most is not the attack itself, but how Drift is trying to handle the situation.
At first, users disliked the idea of converting the remaining assets from lending and borrowing to stablecoins. Some in the community directly stated that the scheme seemed strange and unfair. Later, questions arose about the withdrawal terms, where early withdrawal essentially means additional losses for users.
See also: Aave Wants to Launch Yield on Charity Funds
Against this backdrop, even the permission to withdraw deposits from the Insurance Fund was perceived by many more as a reminder of the prolonged recovery than as something positive.
Why Did Drift Use the Insurance Fund at All?
Insurance Fund in Drift functioned as a safety cushion in case of liquidation issues. Users deposited USDC, SOL, BTC or ETH into separate pools and received a share of trading and liquidation fees.
If the platform had losses after closing positions, this fund would absorb part of the burden. Drift again reminded everyone that the Insurance Fund is needed to maintain the platform’s solvency during problematic situations.
But after the platform stopped on April 1, the fund stakers’ money simply got stuck inside the protocol. All this time, no yield was accrued either. Now the team says that after a full relaunch, users will be able to get their deposits back.
Why the Recovery Plan Caused So Much Negativity
On May 5, Drift published its own recovery scheme after the hack. At its core are recovery tokens—special compensation tokens for affected users.
The team stated that each user would receive a recovery token depending on the amount of confirmed losses. According to the platform’s plan, one token should correspond to one dollar of compensation.
Drift also explained how the compensation fund would work. Initially, about $3.8 million, obtained after converting the remaining assets to USDT, are to be sent there.
See also: BingX Presents Infinite Vision Strategy for Its 8th Anniversary
Payouts are promised to open after the pool size exceeds $5 million. They plan to replenish it with part of the exchange’s revenue, promised support from Tether, and funds from project partners.
But what affected people most was the early withdrawal mechanism.
If a user wants to withdraw money immediately after payouts start, they effectively waive further claims and receive only a share of the funds available in the compensation fund at the time of withdrawal.
Later, Drift clarified separately that early withdrawal would be at a discount compared to the full compensation amount. Those who decide to wait could theoretically receive more if the compensation fund continues to grow.
The community reacted very harshly to this model. One user on the Drift forum, where protocol governance decisions are discussed, even called the vote on reallocating Insurance Fund assets an attempt at money laundering. Others began to question why Drift and Tether still have not disclosed the exact amounts of future compensation fund financing.
Some in the community believe the whole scheme equalizes affected users too crudely. Some asset holders claim their funds were not stolen during the attack at all, but the compensation terms for them turned out to be almost the same as for everyone else.
The rsETH Story Only Added to the Frustration
Additional frustration arose after users began comparing the Drift situation to the recovery of rsETH through DeFi United.
After the attack on the LayerZero bridge, the ecosystem around Aave and KelpDAO quickly gathered support and began restoring services. Less than a month passed from the hack to the partial relaunch.
On May 13, Aave had already started returning the first portion of rsETH back to the bridge infrastructure. The recovery was greatly accelerated by help from other projects and broad support within the DeFi market.
See also: Tor Project Launches Web3 Fundraising to Support Internet Freedom
The situation was further simplified by a federal court decision that allowed some frozen ETH to be transferred for system recovery. After that, contracts began to be gradually unfrozen, and withdrawals were restored in less than a day.
Against this backdrop, many Drift users are especially frustrated by how slowly their platform’s recovery is progressing. Especially since the story with Aave and KelpDAO happened after the Drift hack, but seemed much clearer and more organized to the community.
What Will Happen Next With Drift
Currently, Drift plans to relaunch the platform in the second quarter of 2026. After the relaunch, Drift wants to focus more on perpetual futures trading.
At the same time, some key decisions remain unresolved. The community is still debating how the recovery fund should work and what to do next with the platform’s insurance fund.
According to DefiLlama, TVL Drift is currently around $243 million. Before the hack, the figure exceeded $550 million. The DRIFT token also remains near its lows and is trading around $0.028.
Now, for Drift the main question is not only whether they can close the hole after the hack. It is increasingly coming down to something else: whether the platform will still have a community after all this.
