Balancer to Wind Down Operations After Failed Restructuring

Balancer (BAL) will proceed with a phased shutdown of operations as per governance proposals. Starting next month, support pools will transition to a withdrawal-only state, and the DAO treasury will be returned to token holders.

The protocol restructured in April to become more efficient but saw declining revenues afterward, with the author stating no financial solutions were available to change this trend.

Balancer's stabilization plan has reached its limits. The April restructuring approved budget cuts, halted reward issuance, and transferred protocol fees to the DAO. Version 3 (v3) was expected to drive growth, but most revenue still comes from legacy v2 contracts, with v3 failing to replace it.

Monthly revenue exceeded $1 million in October 2025 but plummeted after a November hack that drained $128 million from v2 pools. DefiLlama data shows no recovery since then.

The decline continued post-April voting, with monthly revenue dropping from just over $200,000 to below $60,000 by August and continuing to fall in September.

Proposed monthly spending of approximately $150,000 exceeds current protocol earnings. Under the proposal, pools that can be paused will switch to withdrawal-only status starting October 30. Non-pausable contracts will continue operating but with protocol fees set to zero for configurable contracts only.

Contributor contracts end on October 31, after which a small transition team will handle minimal withdrawal operations, capping total closure costs at $400,000. The treasury's value is estimated at least $9 million based on current market rates, excluding BAL itself from distribution—only tetuBAL holders are affected.

Phase 1 begins in late May 2027, allowing holders to burn BAL and claim assets proportionally. The window closes in November, with airdrops scheduled for January 2028 and final distributions six months later.

The proposal cancels the BIP-919 BAL buyback and excludes recovered assets from the hack from distribution, leaving them for affected liquidity providers. Snapshot voting runs September 25–29, requiring 5 million BAL to meet quorum. Meanwhile, contributors are preparing a separate proposal to continue infrastructure under a new name, which could add Balancer to the list of closed DeFi projects this year.