Balancer Labs Shutdown After $116M Hack Signals Shift to DAO Led DeFi Model

Balancer Labs, the development team behind the decentralized finance protocol Balancer, has announced plans to shut down operations after facing mounting financial pressure and the aftermath of a $116 million exploit in November. The decision follows months of declining resources and operational challenges that made it difficult for the organization to continue functioning effectively.

One of the protocol’s founders stated that closing the entity was a necessary step, describing the company as having become a liability rather than an asset. The organization had been operating without consistent revenue, increasing financial strain and long-term risk exposure.

Balancer Labs CEO Marcus Hardt added that on X;

Impact of Hack and Falling Total Value Locked

Balancer was among the most prominent DeFi platforms during the 2020–2021 bull market, reaching approximately $3.3 billion in total value locked in November 2021. However, its TVL dropped significantly to around $800 million by October 2025. Following the November exploit, an additional $500 million left the protocol within two weeks, reducing TVL further to about $158 million.

The exploit also created ongoing legal risks, making it difficult to sustain a corporate structure responsible for past security liabilities.

Balancer DAO and Foundation to Lead Future Operations

Executives have proposed transferring operational responsibility to the Balancer Foundation and the protocol’s decentralized autonomous organization. The restructuring plan includes cutting BAL token emissions to zero, revising fee structures to increase DAO revenue capture, and reducing operational costs through a leaner structure.

Despite challenges, the protocol has generated more than $1 million in revenue over the past three months, indicating continued usage while highlighting the need for improved tokenomics and cost management.

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