Key Takeaways
- Balancer is considering a full shutdown after monthly revenue plunged roughly 95%.
- The decline accelerated after a $128 million exploit in November 2025.
- Balancer’s at least $9 million DAO treasury could ultimately be distributed to BAL holders if the proposal passes a Snapshot vote.
Balancer could shut down after more than five years of operations as the decentralized finance (DeFi) protocol struggles to recover from a $128 million exploit and a dramatic collapse in revenue.
A new governance proposal authored by Balancer Treasury Council member Marcus Hardt calls for winding down the protocol and eventually distributing its remaining treasury to BAL token holders.
The proposal is currently under discussion, with a Snapshot vote expected to run from Sept. 25 to Sept. 29. Until then, Balancer said nothing changes for users, with pools and withdrawals continuing to operate normally.
The potential shutdown follows a steep deterioration in Balancer’s finances. Monthly revenue peaked above $1 million in October 2025 but has since fallen by roughly 95%, dropping below $60,000 in August. September is reportedly tracking even lower.
$128M Hack Derailed Balancer’s Recovery
Balancer’s financial problems accelerated after a November 2025 exploit drained approximately $128 million from its v2 pools.
The protocol subsequently approved a restructuring in April designed to establish a leaner and more sustainable operation. The plan included budget cuts, ending BAL emissions and directing protocol fees toward the DAO.
Balancer v3 was expected to become a major source of growth, with new products including AutoRange Pools intended to increase adoption and revenue.
However, v3 failed to generate enough income to replace Balancer’s older infrastructure, with most protocol revenue still coming from v2.
Revenue declined from more than $200,000 in April to less than $60,000 in August, while the proposal estimates Balancer’s total monthly expenses at approximately $150,000.
Hardt argued that continuing operations under the existing model would therefore gradually deplete funds that could instead be returned to BAL holders.
Balancer Treasury Worth at Least $9M Could Go to BAL Holders
Under the proposed shutdown, Balancer would begin winding down operations in stages.
Eligible pools capable of being paused would become withdrawals-only on Oct. 30. Contracts that cannot be paused would continue operating, although protocol fees would be reduced to zero wherever technically possible.
Contributor contracts would end the following day, on Oct. 31.
A smaller transition team would then maintain the infrastructure necessary for withdrawals and other final operations. Spending throughout the wind-down would be capped at $400,000 before the final distribution.
Balancer’s DAO treasury is currently worth at least $9 million, according to figures cited from treasury manager kpk.
The proposal would distribute eligible treasury assets to BAL holders, while BAL tokens held by the DAO itself would generally be excluded.
Funds recovered from the $128 million exploit would also remain separate and continue to belong to affected liquidity providers.
Snapshot Vote Could Determine Balancer’s Future
The proposed treasury distribution would take place considerably later than the operational shutdown.
The first distribution round is expected to begin at the end of May 2027. BAL holders would burn their tokens in exchange for a proportional share of eligible treasury assets, with the initial claim period running until November.
An additional airdrop is planned for January 2028, followed by a final treasury sweep around six months later.
The proposal would also cancel the BAL token buyback previously authorized under BIP-919.
BAL holders will ultimately decide whether the shutdown proceeds. The Snapshot governance vote is scheduled for Sept. 25-29 and requires a quorum of 5 million BAL.
Meanwhile, Balancer contributors are reportedly preparing a separate governance proposal that could preserve parts of the protocol’s infrastructure under a new name.
If the wind-down proposal passes, Balancer’s decline would mark another major retrenchment for the DeFi sector, turning a protocol that generated more than $1 million in monthly revenue less than a year ago into one preparing to return its remaining assets to token holders.
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Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors.
Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
