Balancer has proposed an orderly wind-down of its protocol, citing insufficient revenue generation following a $128 million exploit in November 2025 that affected composable stable pools on its v2 protocol. The proposal, authored by Balancer Labs CEO Marcus Hardt, was published on the Balancer governance forum Monday.
The plan calls for distributing Balancer's remaining treasury, currently valued at more than $9 million, to BAL tokenholders. Token holders would burn BAL to redeem a pro-rata share of treasury assets, replacing a buyback program that tokenholders approved in April.
Hardt said on X that he "underestimated how much the exploit would continue to limit adoption" for the protocol. On-chain data from DefiLlama shows monthly protocol revenue sharply declined after the exploit. Revenue fell from $1.13 million in October 2025 to $371,000 in November 2025, reaching only $56,781 by August 2026.
Balancer Labs shut down in March, with executives opting to operate the protocol under a leaner structure. The restructuring cut costs and delivered products, but the revenue side of the plan did not materialize. Hardt noted on the Balancer forum that most protocol revenue still originated from v2, and v3 revenue did not grow enough to replace it. "The product worked. It did not sell enough," he said.
Under the proposed wind-down, Balancer would begin a phased shutdown next month. New business development would cease, and liquidity providers would have until Oct. 30 to exit the protocol. Pools capable of being paused would transition to withdrawal-only status. For pools that cannot be paused, the protocol fee would be set to zero where contract permissions allow. From Nov. 1, Balancer would operate only the minimal infrastructure necessary to support withdrawals.
The Balancer DAO would be dissolved, with a small dedicated team managing the transition. The proposal allocates up to $400,000 to cover wind-down costs. BAL tokenholders are slated to receive their first treasury distribution no earlier than May 2027. A second distribution would follow, returning any unspent wind-down funds and unclaimed assets.
