Balancer is weighing an orderly shutdown after a governance proposal asked for the protocol to be wound down and the DAO treasury handed out to BAL holders. Balancer said the proposal came from Balancer Labs CEO and current Treasury Council member Marcus Hardt, and it is now on the forum for discussion, with a Snapshot vote expected from Sept. 25 to Sept. 29.
So far, the team said, no shutdown decision has been made. Liquidity pools are still running. Withdrawals too. And any move toward an exit would happen only if governance signs off on the proposal.
Proposal follows a restructuring that failed to restore revenue
Hardt said Balancer token holders approved a restructuring plan in April this year. The plan called for cost cuts, an end to BAL emissions, a simpler token model, protocol revenue being directed to the DAO, and a bet on Balancer v3 to spark growth.
Since then, the team rolled out AutoRange Pools, kept maintaining Boosted Pools, and chased new integrations and partnerships. But Hardt said none of that produced lasting revenue growth. At the same time, some key contributors either left or stepped back. The post-restructuring team ended up smaller than first expected.
He said most protocol revenue still comes from the older v2 version, while v3 revenue has not increased enough to take its place. In his view, sticking with the current approach would just keep eating into the treasury and land in the same place anyway.
Hardt wrote: "The question is whether the remaining assets should be returned to BAL holders while they still have meaningful scale, or spent first on a path that has already been tried."
Proposal lays out spending, revenue and treasury position
According to the proposal, Balancer’s total monthly spending is about $150,000. Protocol revenue in August came in at about $30,000, down from roughly $97,000 in June. Asset management of the DAO treasury adds around $25,000 in monthly income.
Hardt said Balancer is not anywhere near running out of money. At current token prices, the managed DAO treasury is worth at least $9 million. Other assets spread across different wallets, addresses, and multiple chains are still being inventoried. He pitched the proposal as a way to stop burning treasury resources while the treasury still has real size and to send the remaining value back to BAL holders.
Shutdown plan would begin with withdrawal-only pools in October 2026
If the proposal wins the Snapshot vote, Balancer would begin a phased wind-down.
Under the current plan, liquidity pools that can be paused would stop trading on Oct. 30, 2026 and shift into a withdrawal-only state. Pools that need it would be put into Recovery Mode so liquidity providers can still pull out their assets.
Pools that cannot be paused would keep running under their smart contracts, and protocol fees would be cut to zero where those contracts permit it. Balancer’s frontend, routing system, and official information channels would mark those services as discontinued.
Because Balancer runs on non-custodial smart contracts, user withdrawals would not rely on the team staying active. During the wind-down, the team plans to publish documentation showing users how to withdraw through the official interface, third-party tools, or direct smart contract interaction.
Starting Nov. 1, 2026, Balancer’s infrastructure would be cut back to a bare-minimum withdrawal interface, the required data indexing, and public documentation. After that, administrative permissions, multisig roles, and other privileged access would be removed step by step. The stated goal is simple: a protocol that no longer relies on any Balancer team member to keep working, while the DAO also gives up revocable special control.
BAL would need to be burned to claim treasury assets
The proposal would hand out treasury assets in two rounds, followed by a final settlement, based on BAL circulating supply. Holders would not get one stablecoin. They would receive the mix of tokens actually sitting in the treasury at that time.
The first round is expected to open by the end of May 2027. Before that happens, the treasury would be inventoried and audited, and the snapshot block would be published at least two weeks ahead of time.
BAL holders would need to burn their tokens to claim a proportional share of treasury assets. The first claim window would remain open for six months, ending by late November 2027.
The second round is expected by the end of January 2028. It would distribute unused liquidation budget from the first round, protocol revenue received after that, receivables, and any unclaimed amounts to addresses that took part in the first conversion. Addresses that did not burn BAL in the first round would not be eligible for the second distribution.
A final settlement is expected by the end of July 2028. Any remaining assets received after that point would be distributed again on the same basis, formally finishing the treasury distribution and legal wind-down process.
The proposal also said BIP-919 had earlier planned to use up to 35% of the DAO treasury to buy back BAL at net asset value. If the new proposal passes, that buyback would be scrapped and replaced with the burn-and-claim mechanism.
Liquidation budget capped at $400,000
The plan sets a maximum $400,000 exit budget starting in November 2026, including:
- $150,000 through May 2027
- $30,000 after that through the final settlement
- up to $220,000 kept as an emergency reserve
The budget would pay for minimum withdrawal infrastructure, documentation, permission removal, veBAL unlock support, development and audit of claim contracts, and the closure of legal entities.
The proposal said the $400,000 figure is a spending cap, not a fixed amount to be allocated upfront. Any money left unused would go back to the treasury and be distributed to BAL holders in later rounds.
Balancer contributor contracts are set to end on Oct. 31. After that, only a small transition team, paid by the hour, would remain to carry out the wind-down.
Hack in 2025 still hangs over the protocol
Balancer traced the current crisis back to Nov. 3, 2025. On that date, Balancer v2 liquidity pools across multiple blockchains were attacked through a rounding-error vulnerability in swap logic, leading to about $128 million in asset outflows.
In March this year, co-founder Fernando Martinelli announced the closure of Balancer Labs as a corporate entity, saying it had gone from being an "asset" for the protocol to a "liability." He said at the time that the company, not the protocol itself, was being shut down, and that Balancer would continue under a leaner operating structure.
That restructuring included ending BAL emissions, ending the veBAL governance model, adjusting fee distribution, narrowing the focus to a smaller set of core products, and moving the original team into a new operating entity, Balancer OpCo.
In the latest proposal, Hardt said the 2025 exploit hit the legacy v2 system and that v3 uses a different architecture, but the Balancer brand has had a hard time escaping the shadow of the security incident. He said that has made it tougher to attract users and partners.
He added that the hack was not the only driver behind the shutdown proposal. The main issue, he said, is that the restructuring still failed to produce the market adoption and revenue growth the protocol needed.
Martinelli also replied on the forum, calling the outcome bittersweet and saying he fully supports Hardt’s proposal. He said the team pushed hard to turn things around after the 2025 hack, but never managed to get past the burden left by the incident, and that an orderly ending is now the calmest and most pragmatic option.