Balancer Proposes Protocol Shutdown and $9M Treasury Distribution to BAL Holders

Balancer has proposed a phased protocol shutdown and the allocation of at least $9 million (approximately 12.1 billion KRW) in treasury funds to BAL token holders. If approved, certain liquidity pools will transition to withdrawal-only mode starting October 30, 2026. The proposal, posted on the Balancer governance forum on September 14, precedes a Snapshot vote from September 25-29.

Until the vote concludes, no changes will occur to pool operations or withdrawal methods. Approved proposals would allow certain pools to pause before transitioning to withdrawal-only mode, while non-pausable pools continue operating with potential protocol fee reductions to zero. Withdrawals remain possible regardless of protocol sustainability. A communication plan for contributors is scheduled through October 31.

BAL holders will be able to burn tokens and receive treasury funds in physical and proportional amounts from May 2027, with secondary distributions planned for January 2028 and final residual asset allocations by July 2028. Actual distribution amounts depend on asset prices at the snapshot date in May 2027, including costs and recoveries. The $9 million figure is a minimum based on current token pricing but not an exact allocation.

Balancer plans to investigate additional assets from other DAO wallets before finalizing the first distribution list. The proposal replaces the canceled BAL buyback plan with direct treasury distribution after deducting operational costs. This follows failed recovery efforts, including a 2026 April plan involving cost-cutting, token emission halts, and v3 product launch, which did not achieve sustained revenue growth.

Protocol revenue remains largely from v2 pools, while v3 revenue has not fully replaced it. Monthly protocol revenue as of August 2026 is projected at around $30,000 (approximately 4.041 million KRW), down from $97,000 in June. Monthly operational costs are approximately $150,000 (around 22.1 million KRW). The protocol has maintained a structure where operating expenses exceed revenue since the November 2025 hack, which impacted legacy v2 pools but not v3.

Recovery funds for affected liquidity providers (LPs) are separate from treasury distributions: external whitehat recoveries of approximately $3.85 million and internal recoveries of about $4.11 million will go directly to victims. Alternative proposals include a partnership with WiseSoft for stablecoin fund management and revenue improvement, while some community members suggest new use cases like equity pools.

Balancer co-founder Fernando Martinelli supports the shutdown proposal, stating recovery attempts post-hack did not yield desired results. The vote will determine future withdrawal transitions and treasury distribution schedules after September 25-29 Snapshot voting.