TLDR
- Balancer Labs plans to shut down while the protocol shifts to a DAO, foundation, and service-provider model.
- Martinelli linked the shutdown to legal exposure after the November 2025 exploit and weak corporate revenue.
- Balancer may end BAL emissions, wind down veBAL, and send all protocol fees to the DAO treasury.
- Balancer’s TVL fell from about $3.3 billion in 2021 to around $158 million during the downturn.
- The protocol remains active and generated more than $1 million in revenue over the past three months.
Balancer Labs is preparing to shut down as co-founder Fernando Martinelli pushes a broad DAO overhaul plan. The protocol will continue operating, but its structure will change as Balancer moves toward a DAO, foundation, and service-provider model.
Martinelli said Balancer Labs no longer fits the protocol’s needs. He tied the move to legal pressure after the November 2025 exploit and weak revenue under the current setup.
Balancer Labs moves toward closure
Martinelli said Balancer Labs had reached the end of its role. He said the company had become “a liability rather than an asset” to the protocol’s future. He also said the team had carefully reviewed the next steps.
The shutdown does not mean the Balancer protocol will stop. Core functions will shift to the DAO, the foundation, and a new operating company. Part of the team will stay involved, and costs are expected to fall.
Martinelli said Balancer Labs helped launch the protocol and funded its early work. Still, he said the structure no longer made sense. He added that the new model should be leaner and easier to maintain.
Exploit and weak revenue shaped the decision
Martinelli linked the planned shutdown to the November 2025 exploit. He said the hack created “a real and ongoing legal threat” for the company. That pressure made it harder to keep a normal corporate structure in place.
Balancer’s leadership also pointed to the project’s economics. Chief executive Markus Hardt said the cost of attracting liquidity stayed above actual revenues. He said the protocol still works, but the financial structure needs changes.
The numbers show the scale of the decline. Balancer’s total value locked peaked near $3.3 billion in 2021. It has since fallen to about $158 million. BAL’s market value has also dropped about 99% from its peak.
Even so, Martinelli said the protocol generated more than $1 million in revenue over the past three months. That suggests the product still has activity. It also suggests the team sees room for a new setup.
DAO overhaul plan targets fees emissions and governance
Martinelli backed a wider reset for Balancer’s token model and governance system. The proposals include ending BAL emissions and winding down veBAL. They also include sending all protocol fees to the DAO treasury.
The plan would also remove liquidity incentives under the current model. Another proposal would create a token buyback path for exiting investors. These changes aim to reduce spending and improve treasury control.
The transition also comes with added governance focus. During any shift from a company to a DAO-led structure, control points matter more. Access rights, upgrade powers, and treasury controls often face closer scrutiny.
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