Balancer Faces Wind Down as Revenue Fails to Recover

Balancer (BAL) would undergo a phased shutdown under a governance proposal that shifts eligible pools to withdrawals-only mode next month and distributes the DAO treasury back to token holders.

The protocol underwent a restructuring in April aimed at achieving profitability with a reduced cost base. Revenue has consistently declined since then, and the proposal's author states there is no funded alternative that could alter the trajectory.

Balancer's Restructuring Strategy Hits a Dead End

Balancer approved a restructuring in April that cut its budget, halted emissions, and directed protocol fees to the DAO. Version 3 (v3) was anticipated to drive growth.

AutoRange Pools, the feature the plan relied on, was released. Despite this, most revenue continues to come from the older v2 contracts, and v3 has not taken their place.

Monthly revenue exceeded $1 million in October 2025 but collapsed after the November exploit drained $128 million from v2 pools. It has not regained those levels, according to DefiLlama data.

The decline persisted after the April vote. Revenue dropped from just over $200,000 that month to under $60,000 in August, with September trending even lower.

“The revenue picture is why this comes now. Most of the protocol’s revenue still comes from v2. v3 revenue has not grown to replace it. BIP-918 set a review for exactly this case. This proposal is that review, brought early. Waiting for the calendar would change the numbers, not the conclusion, and every month of waiting is spent from the treasury,” the proposal states.

The proposal estimates total monthly costs at nearly $150,000, which exceeds current protocol revenue.

“Continuing on the current path spends the treasury to arrive at the same place later. That treasury belongs to BAL holders. The question is whether what remains reaches holders while it is still substantial, or is spent first on a path that has already been tried,” Marcus Hardt, Balancer Treasury Council member and author of the proposal, added.

Two Distribution Rounds, a Token Burn, and a 2027 Payout

According to the proposal, pools that can be paused would switch to withdrawals-only on October 30. Contracts that cannot be paused would continue operating, with protocol fees set to zero where possible.

Contributor contracts will end on October 31. A small transition team would then manage a minimal withdrawal system, with winddown costs capped at $400,000 until the final distribution.

The treasury is valued at least $9 million at current prices, based on figures from treasury manager kpk. BAL is excluded from distributable assets, except for the portion owed to tetuBAL holders.

The first distribution round would open at the end of May 2027. Holders would burn BAL and claim a pro rata share in kind, with the window closing that November. An airdrop follows in January 2028, ahead of a final sweep six months later.

The proposal would also cancel the BAL buyback approved under BIP-919. Funds recovered from the exploit remain with affected liquidity providers and are excluded from the distribution.

Snapshot voting runs from September 25 to September 29, with a quorum of 5 million BAL. Separately, contributors are drafting a proposal to keep the infrastructure running under a different branding. If approved, Balancer would join a growing list of DeFi projects that shut down this year.