Balancer Proposed Winding Down the Protocol and Distributing the Treasury Among BAL Holders

• The Balancer community has proposed a phased wind-down of the protocol and the shutdown of the DAO.
• A treasury of at least $9 million is planned to be distributed among BAL holders.
• Amid the fallout from the hack, Balancer’s TVL has fallen by more than 90% from pre-attack levels.

The Balancer community proposed a phased wind-down of the DeFi protocol, a halt to developing new initiatives, and the shutdown of the DAO to the extent legally and technically possible. 

The proposal has not yet been approved. A Snapshot vote is scheduled for September 25–29, 2026.

If governance participants back the plan, on October 30, pools that can be paused will be switched to withdrawal-only mode. For the rest, the protocol fee will be set to zero where smart contracts allow. Starting November 1, the infrastructure will be reduced to the minimum set of tools needed to withdraw assets and complete the wind-down.

Balancer’s treasury is currently estimated at at least $9 million. After covering wind-down costs, the remaining assets are proposed to be distributed to BAL holders in proportion to their share. To receive funds, users will need to burn their tokens.

The first distribution phase is expected to begin in late May 2027. The second round is planned after the end of a six-month redemption period, and the final distribution of remaining assets is slated for July 2028.

The proposal also calls for canceling the previously approved BAL buyback. The maximum budget for the wind-down is estimated at $400,000.

The initiative’s authors cited a lack of sustainable growth. The protocol’s monthly revenue fell from about $97,000 in June to $30,000 in August, while current expenses are around $150,000 per month. 

The treasury also generates about $25,000 per month. In the BIP authors’ view, continuing operations under this trajectory would gradually reduce the funds BAL holders could receive.

How the Hack Affected Balancer

On November 3, 2025, Balancer was hit by a major exploit affecting v2 pools. At the time of the incident, damages were estimated at more than $128 million. The attack impacted multiple networks and became one of the largest DeFi hacks of that year.

The fallout was significant. After the attack, Balancer’s TVL fell from $775 million to $258 million, and BAL lost around 30% of its value. The DAO later discussed distributing recovered funds among affected liquidity providers.

The decline continued even after the initial market reaction. According to DeFiLlama, around $60 million is currently locked in Balancer. That is about 92% below the $775 million level before the hack. Over the past 30 days, the protocol generated around $209,000 in fees.

In March 2026, project co-founder Fernando Martinelli had already announced the gradual shutdown of Balancer Labs. He cited legal risks after the attack and the inefficiency of the corporate structure. At the same time, the protocol itself was expected to be preserved under DAO governance.

The new proposal emphasizes that the exploit is not the only reason for a potential shutdown. However, the attack damaged Balancer’s reputation and made it harder to attract users and partners. 

After the restructuring, the protocol also failed to achieve the required growth — Balancer v3 revenue did not replace inflows from the aging v2 version.

Funds that were recovered, or may still be recovered, after the hack will not be included in the treasury to be distributed. They will remain earmarked for liquidity providers affected by the attack.

Сообщение Balancer Proposed Winding Down the Protocol and Distributing the Treasury Among BAL Holders появились сначала на INCRYPTED.