Drift Foundation Responds to Community, DFX Not Pegged to 1 USDT
The Drift Foundation responded to the community, stating that DFX is not pegged to 1 USDT. Users receive 1 DFX for every 1 USDT confirmed as a loss, and the redemption value depends solely on the balance of the Recovery Pool divided by the unredeemed supply at that time.
The foundation stated that the recovery pool currently covers only about 1% of total claims. At launch, the pool contained approximately 3.1 million USDT, with a fixed supply of 299,500,810.998 DFX, and no further issuance will occur. Based on this, the immediate redemption is approximately 0.0104 USDT per DFX, equivalent to recovering about 1 cent for every 1 dollar lost. Redemption will destroy tokens and distribute USDT in the same transaction, and once redeemed, rights to subsequent funds entering the pool are forfeited.
This batch of tokens corresponds to verified losses after the theft from the perpetual contract exchange on April 1. The foundation's recovery update on September 30 recorded user losses at approximately $295.4 million, while the token supply is locked based on approximately $299.5 million in verified losses. Claims must be made using wallets that controlled Drift accounts on the day of the incident, with the portal verifying snapshots using Merkle proofs, and the deadline is January 1, 2028, at 00:00. DFX that is not claimed by the end of the window will be destroyed, while claimed tokens will not be burned due to the deadline.
Users can redeem, continue to hold, or trade on secondary markets like Raydium. Holding retains the right to claim future inflows into the recovery pool, and as the supply decreases, the corresponding share per token increases. The foundation makes no statements about secondary prices, which can be above or below the redemption amount. There is also a separate insurance fund claim, with terms distinct from DFX.
Funds are injected daily. The rebuilt exchange was renamed Velocity in July, and at each UTC midnight, a portion of net protocol revenue is allocated to the recovery pool: 60% of daily revenue up to 30,000 USDT, 70% from 30,000 to 100,000 USDT, and 90% for amounts exceeding 100,000 USDT. Tether has committed up to 127.5 million USDT to support the restart and user recovery, with strategic partners committing up to 20 million USDT, but the foundation clarified that this is not a total amount already received, but a commitment matching Velocity's net income. Contributions to the pool will continue until the total amount received covers all verified losses.
This is a pricing clarification following the launch of the compensation tool, not a new payment being received. Sellers are users who choose to redeem immediately or sell on the secondary market, while buyers are secondary traders willing to bet on future income and committed funds entering the pool. Immediate redemption takes about 1% of cash from the pool and cancels the claim, while continuing to hold concentrates the remaining claim rights onto fewer tokens. Beneficiaries are those who can wait for Velocity's income and committed funds to materialize, while those under pressure need to recover their principal immediately but can only redeem at about 1 cent for 1 dollar.
Source: Public Information
ABAB AI Insight
Drift was originally a perpetual contract exchange on Solana, and after the theft on April 1, users lost approximately $295 million. The protocol was subsequently rebuilt and renamed Velocity in July, with the foundation issuing a fixed supply of DFX on October 1. The approach is not to buy back the debt in one go from the treasury, but to turn verified losses into non-inflatable claims certificates. Tether has provided a matching commitment of up to 127.5 million USDT, and partners up to 20 million USDT, none of which entered the pool at startup, which only had about 3.1 million USDT.
The order of fund movement prioritizes transaction fees, with committed funds coming later. Velocity allocates 60% to 90% of net protocol revenue to the recovery pool daily, with the percentage increasing as daily revenue crosses 30,000 and 100,000 USDT. If users redeem, tokens are destroyed, and USDT leaves the pool, with subsequent allocations belonging only to remaining holders. Therefore, the secondary market trades on a claim or potential claim: prices on Raydium reflect buyers' discounts on future fees and commitment realizations, not a 1:1 stablecoin.
Similar structures include Bitfinex's LEO issued after its theft in 2016 and debt tokens after trading platforms go bankrupt. LEO ties platform income and buybacks to token rights, with prices detaching from initial book losses as the exchange recovers. Mt. Gox's fiat debt claims must wait for the liquidation of custodial assets, with early transfer prices long below face value. Drift is currently in a control phase rather than an expansion phase: the trading interface has been rebranded, but the completion of converting the $295 million loss from contingent commitments to pool balance remains unfinished.
This represents a transfer of pricing power. The compensation ratio is no longer determined by the lost principal but by the recovery pool balance and the unreleased supply. The mechanism breaks down a liability that cannot be paid immediately into tradable certificates, allowing those in urgent need of cash to exit at about 1% while letting those willing to wait take on the concentrated remaining claims. The exchange uses future fees to finance old debts, while creditors trade time for potentially higher redemption amounts per token.
ABAB News · Law of Cognition
1:1 issuance does not equal 1:1 redemption.
Those who redeem first take cash, while those who hold take a proportion.
Commitments are the upper limit, while pool balance determines the price.