Balancer is considering a structured shutdown of its decentralized finance protocol, with a governance proposal that would stop new development, transition eligible pools to withdrawals-only, and eventually distribute the DAO's treasury to BAL holders. The plan was introduced by Marcus Hardt, a Treasury Council member and former Balancer Labs CEO, and remains subject to a Snapshot vote expected to take place from September 25 to September 29.
The proposal argues that Balancer is spending more than it earns. Monthly operating costs are approximately $150,000, while August protocol revenue reached only about $30,000. Treasury management added roughly $25,000 per month, but that still left the DAO running at a deficit. Earlier efforts approved in April to cut costs, end emissions, simplify the token model, route protocol revenue to the DAO, and grow through v3 products did not create enough sustained revenue to replace older v2 income.
If BAL holders approve the wind-down, there would be no immediate shutdown. Contributor notice would run through October 31, and pools that can be paused would move to withdrawals-only on October 30. The bug bounty program would end. The first proposed BAL treasury redemption round would open at the end of May 2027 and run for six months. During that window, eligible BAL holders could burn BAL for a pro-rata, in-kind share of the treasury. A second-round airdrop would go only to addresses that redeemed in round one, covering unspent wind-down funds, later receipts, and unredeemed shares. A final sweep six months later would distribute any remaining inflows.
The treasury is estimated at more than $9 million under current management, but the final distributable amount would depend on a completed inventory, audit, token prices, receivables, third-party funds, and wind-down costs. The proposal sets aside up to $400,000 from November 1 onward, including $150,000 through May 2027, $30,000 for the later distribution process, and a $220,000 reserve. Funds recovered from previous exploits would remain separate and allocated to affected liquidity providers rather than being included in the BAL-holder distribution.
Different Balancer users would follow different routes. Liquidity providers would need to review their pool's withdrawal mechanism. veBAL holders would exit the 80/20 BAL/WETH pool into BAL before redeeming. auraBAL and sdBAL holders would need to unwind through their own protocols and convert into BAL before the first-round deadline. tetuBAL holders would receive BAL equal to half of the measured BAL behind their position and redeem in the same first-round process. Missing the first redemption window could mean missing both the initial distribution and any later DAO proceeds.
The proposal comes six months after Balancer Labs, the protocol's corporate entity, closed down following a November 3, 2025 exploit that drained around $128 million from various Balancer v2 pools across multiple chains.
