Balancer Proposes Winding Down Protocol After Revenue Recovery Fails

Decentralized exchange Balancer has proposed shutting down operations after its post-exploit restructuring failed to bring back enough revenue, with the protocol’s leader saying he underestimated how long a major hack would continue hurting adoption.

Why Balancer Is Stepping Back

The wind down proposal, published Monday on Balancer’s governance forum, comes months after a $128 million exploit in November hit the protocol’s legacy v2 pools. Balancer Labs CEO Marcus Hardt said the newer v3 version worked as designed but never generated enough revenue to replace what v2 used to bring in. Protocol revenue fell from $1.13 million in October to $371,000 in November after the exploit, and continued sliding to just under $57,000 by August. Hardt said the incident kept shadowing the protocol’s reputation even though v3 uses different architecture.

What The Wind-Down Would Look Like

Under the plan, new business development would stop next month, giving liquidity providers until October 30 to exit. Pools that can be paused would shift to withdrawal-only mode, while others would have fees reduced to zero where possible. Starting November 1, only minimal infrastructure needed for withdrawals would remain active. The proposal sets aside $400,000 to manage the transition and would distribute the protocol’s remaining treasury, currently over $9 million, to BAL tokenholders starting in May 2027, with a final sweep six months later.

The plan requires holder approval through a snapshot vote scheduled for September 25 to 29.