The Balancer community has proposed a phased wind-down of the DeFi protocol, an end to the development of new initiatives and the closure of the DAO to the extent legally and technically possible. The proposal, which cites a lack of sustainable growth, is due to go to a Snapshot vote from September 25 to September 29, 2026.

If governance participants approve the plan, pools that can be paused will switch to withdrawal-only mode on October 30. For other pools, protocol fees will be set to zero where their smart contracts allow.

Starting November 1, Balancer’s infrastructure would be reduced to the minimum set of tools required to withdraw assets and complete the wind-down.

The protocol’s treasury is currently estimated at at least $9 million. After wind-down costs are paid, the proposal calls for distributing the remaining assets among BAL holders in proportion to their holdings. Users would have to burn their tokens to receive funds.

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

The proposal would also cancel a previously approved BAL buyback. Its authors estimate the wind-down will require a maximum budget of $400,000.

Balancer’s monthly revenue declined from about $97,000 in June to $30,000 in August, while current monthly expenses stand at about $150,000, according to the proposal. The treasury generates an additional roughly $25,000 per month.

The proposal’s authors said continuing operations on that trajectory would gradually reduce the amount available for distribution to BAL holders.

Impact of the Balancer hack

Balancer suffered a major exploit affecting its v2 pools on November 3, 2025. Losses were estimated at more than $128 million at the time. The attack affected multiple networks and became one of the largest DeFi hacks of 2025.

After the exploit, Balancer’s total value locked fell from $775 million to $258 million, while BAL lost about 30% of its value. The DAO later discussed distributing recovered funds among liquidity providers affected by the attack.

The decline continued after the initial market reaction. About $60 million is currently locked in Balancer, according to DeFiLlama, representing a decline of about 92% from the pre-hack level of $775 million. The protocol generated roughly $209,000 in fees over the past 30 days.

In March 2026, Balancer co-founder Fernando Martinelli announced the gradual shutdown of Balancer Labs, citing legal risks following the attack and the inefficiency of its corporate structure. At the time, the protocol itself was expected to remain under DAO governance.

The new proposal says the exploit is not the only reason for the potential shutdown. However, its authors said the attack damaged Balancer’s reputation and made attracting users and partners more difficult.

The protocol also failed to achieve the required growth after restructuring, with revenue from Balancer v3 failing to replace inflows from the aging v2 version.

Funds recovered, or potentially recovered in the future, following the hack would not be included in the treasury distribution. Those assets would remain earmarked for liquidity providers affected by the attack.

Source: Incrypted