Balancer, a decentralized exchange and automated market maker, has proposed winding down the protocol after its post-exploit restructuring failed to generate enough revenue, with its leader saying he underestimated how much a $128 million exploit in November would continue to weigh on adoption.
The proposal was authored by Balancer Labs CEO Marcus Hardt and published on the Balancer governance forum on Monday. It calls for an orderly wind-down of the protocol and the distribution of its remaining treasury, currently worth more than $9 million, to BAL tokenholders.
The proposal comes after Balancer Labs shut down in March, when executives opted to continue operating the protocol under a leaner structure. Hardt said Monday that while the restructuring succeeded in cutting costs and delivering the products promised to tokenholders, the revenue side of the plan fell short, echoing profitability challenges faced by several other DeFi protocols this year.
“What did not come was enough revenue. Most of the protocols revenue still comes from v2, and v3 revenue has not grown to replace it. The product worked. It did not sell enough,” Hardt said in a statement on X.
Data from DefiLlama show that Balancers monthly protocol revenue fell to $371,000 in November from $1.13 million in October after an exploit affecting composable stable pools on its legacy v2 protocol. Revenue continued to trend downward into 2026, with August revenue at just $56,781.
“The November 2025 exploit hit legacy v2 pools. v3 is a different architecture, but the event followed the name into every conversation since and made traction harder to build,” Hardt said on the Balancer forum.
“I underestimated how much the exploit would continue to limit adoption,” he added in a separate post on X.
Balancer wind-down proposal
Under the proposal, Balancer would begin a phased shutdown next month, with new business development ending and liquidity providers given until Oct. 30 to prepare to exit the protocol. Meanwhile, pools that can be paused would move to withdrawal-only, while those that cant be paused will continue working but have the protocol fee set to zero where contracts allow it.
From Nov. 1, Balancer would operate only the minimal infrastructure needed to support withdrawals, and the DAO would be wound down, with a small team to manage the transition. The proposal sets aside up to $400,000 for the wind-down process.
Related: Balancer Labs shuts down 4 months after $100M+ exploit, protocol to continue
BAL holders would receive the remaining treasury on a pro-rata basis, with the first distribution scheduled for May 2027, when holders would burn their BAL in exchange for their share of the treasury assets.
A second distribution would return unspent wind-down funds, unclaimed assets from the first distribution, followed by a “final sweep” six months later.
Hardt said delaying a wind-down would eat into the treasury without changing the ultimate outcome.
“Continuing on the current path spends the treasury to arrive at the same place later. 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,” he said.
The wind-down requires approval from BAL holders, with a snapshot vote scheduled for Sept. 25 to 29. A rejection would leave Balances existing operating framework in place.
Magazine: Why are AIs biggest companies suddenly asking to slow down？