On Monday, Balancer Labs CEO Marcus Hardt posted a proposal on the Balancer governance forum that would shut down the decentralized exchange. The plan comes after a restructuring failed to restore revenue for the platform.
The proposal envisions a measured wind-down alongside the allocation of the remaining treasury, which is presently valued at over $9 million, among BAL tokenholders. Hardt stated that the restructuring achieved cost reductions and delivered on promised products, though revenue from the protocol’s newer version, v3, failed to grow sufficiently to replace the older v2 system.
Hardt’s Statement
The exploit Hardt referred to came from November 2025, and it struck legacy v2 pools. Even though he noted that v3 operates under a distinct architecture, the incident attached its name to every subsequent discussion, complicating efforts to build momentum around the newer design.
“I underestimated how much the exploit would continue to limit adoption,” he added in a separate post on X.
The Numbers Behind the Proposal
Data from DefiLlama show that Balancer’s monthly protocol revenue fell sharply after the exploit. Revenue dropped to $371,000 in November from $1.13 million in October. It continued to fall into 2026, with August revenue at just $56,781.
| Month | Revenue |
|---|---|
| October | $1.13 million |
| November | $371,000 |
| August | $56,781 |
What the Wind-Down Plan Covers
Balancer is set to start its staged shutdown next month. The development of new business has ended, and liquidity providers now have until Oct. 30 to get ready for an exit. Pools that can be paused will switch to withdrawal-only mode; for pools that cannot be paused, the protocol fee will be set to zero wherever contracts permit it.
Starting from Nov. 1, Balancer has kept running only the bare minimum of infrastructure needed to support withdrawals. A small team manages the transition as the DAO winds down. Up to $400,000 has been set aside for the wind-down process.
Treasury Distribution to BAL Holders
The treasury’s remaining funds will be distributed to BAL holders on a pro-rata basis, with the first distribution set for May 2027. At that time, holders will burn their BAL in exchange for their share of the treasury assets.
The second distribution pays back any remaining wind-down money and any unclaimed property from the first round, with a “final sweep” arriving six months after that.
Hardt made the case that waiting to shut down operations would merely exhaust the treasury before arriving at the same destination. “That treasury belongs to BAL holders. The question is whether what remains reaches holders while it is still substantial, or is spent first on a path that has already been tried,” was his point.
Vote and Timeline
Approval from BAL holders is needed before the wind-down can proceed. A snapshot vote has been set for Sept. 25 to 29. If the vote rejects the proposal, Balance will keep its current operating framework unchanged.
This proposal captures a wider struggle that has affected DeFi more broadly. Profitability troubles struck several other DeFi protocols during this year.
The issue facing Balancer is straightforward: an exploit targeted v2 pools, and the label stuck with it. V3 operated successfully as a product, yet it failed to generate sufficient sales to restore the revenue stream that vanished.
The wind-down plan is orderly, and the treasury distribution follows a pro-rata basis. The core problem has not gone away. Hardt underestimated how much the exploit would continue to weigh on adoption. Cutting costs and shipping new products did nothing to bring revenue back.
Balancer has decided that handing out treasury funds directly to tokenholders is a better course than following a path that has already been tested.
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