Balancer is moving closer to a possible shutdown after its restructuring failed to produce a sustainable revenue recovery.
The decentralized exchange has proposed an orderly wind-down that could return more than $9 million in treasury assets to BAL holders.
Balancer Labs CEO Marcus Hardt submitted the proposal on the protocol’s governance forum, saying the business continued to struggle after a major exploit weakened confidence and made user growth more difficult. The proposed closure still requires approval from BAL holders, with a Snapshot vote scheduled for Sept. 25 through Sept. 29.
Revenue Weakness Puts Pressure on Balancer
The latest proposal follows an earlier attempt to keep Balancer operating with a leaner structure.
Balancer Labs shut down in March 2026, but the protocol continued under a reduced operating model. That restructuring helped lower costs and allowed the team to deliver previously promised products. However, those savings were not matched by stronger revenue.
According to Hardt’s proposal, most protocol income still comes from Balancer v2. Meanwhile, v3 has not generated enough revenue to replace the older version’s contribution.
Hardt made a similar point in comments posted on X, saying the technology performed as intended but commercial demand remained too weak. Revenue figures cited from DefiLlama illustrate the scale of that problem.
Balancer generated about $1.13 million in protocol revenue during October 2025. In November, that figure fell sharply to roughly $371,000 following an exploit involving composable stable pools on Balancer’s older v2 system. The original report estimated the incident’s losses at $128 million.
Revenue failed to recover during 2026. According to the cited DefiLlama figures, monthly protocol revenue fell to $56,781 in August.
Hardt said the November 2025 exploit played a significant role in that weakness, even though the affected pools belonged to the legacy v2 architecture rather than Balancer v3. Notably, he said the reputational impact extended beyond the compromised system and continued to shape perceptions of the broader Balancer brand.
He later acknowledged on X that he had underestimated how long the exploit would weigh on adoption.
With revenue still under pressure, Balancer is weighing whether staying operational could leave tokenholders with less value in the end.
Proposed Shutdown Would Happen in Stages
Under the proposed plan, Balancer would begin scaling down operations next month.
The first step would be ending new business development, while liquidity providers would have until Oct. 30 to prepare their exits. After that, pools with pause functionality would move into withdrawal-only mode, allowing users to remove funds while normal activity stops.
Pools that cannot be paused would continue operating. However, protocol fees would be reduced to zero wherever the underlying contracts permit that change.
The transition would enter another phase from Nov. 1. At that point, Balancer would maintain only the infrastructure needed to support withdrawals, while the decentralized autonomous organization, or DAO, would begin winding down.
A smaller team would remain in place to manage the process and support the final stages of closure. To cover those costs, the proposal sets aside up to $400,000 for wind-down expenses.
Hardt argued that continuing under the current model would gradually consume the remaining treasury. In his view, further spending would delay rather than change the likely outcome, making the preservation of treasury assets for BAL holders an important consideration.
Accordingly, the plan would distribute the remaining assets to tokenholders after paying all wind-down costs.
BAL Holders Could Receive Remaining Treasury Assets
If BAL holders approve the plan, Balancer would distribute its remaining treasury based on each holder’s proportional ownership.
The first distribution is scheduled for May 2027, when holders would burn their BAL tokens to receive their share of the treasury assets.
The process would not end with that initial distribution. A second round would return any unused wind-down funds and assets left unclaimed after the first distribution, followed by a final sweep six months later.
Before any of those steps can begin, however, the community must approve the shutdown through Snapshot.
If the proposal is rejected, Balancer would remain under its existing operating structure.
The Sept. 25-29 vote will therefore determine whether Balancer proceeds with an organized closure or continues operating despite its persistent revenue challenges.