Balancer Labs, the team behind the Balancer Protocol, is winding down operations after months of financial strain worsened by a devastating $116 million exploit in November.
Co-founder Fernando Martinelli described the decision as difficult but necessary, noting that the company had become “a liability rather than an asset” due to its lack of revenue and mounting legal risks tied to the breach.
— Marcus | Balancer (@Marcus_Balancer) March 23, 2026
Financial strain and hack fallout force shutdown
The fallout from the hack accelerated an already steep decline. Once a DeFi leader with a peak total value locked (TVL) of $3.3 billion in November 2021, Balancer saw its TVL shrink to $800 million by October 2025. The exploit triggered an additional $500 million drop within weeks, leaving the protocol with just $158 million today, highlighting how deeply security incidents can erode trust in decentralized finance.
CEO Marcus Hardt acknowledged that Balancer Labs’ strategy had become unsustainable. The firm spent heavily to attract liquidity, often at the expense of revenue generation, ultimately diluting holders of the BAL token without delivering long-term value.
Further compounding the challenges, Bitget delisted the BAL/USDT spot trading pair. This decision, based on a periodic review of trading volume and liquidity, is seen as a bearish development for the BAL token. It reduces liquidity and trading access on a major platform, potentially indicating diminished market demand or a lack of exchange confidence in the token’s immediate future activity.
DAO-led restructuring offers a second chance
Despite the shutdown, Balancer’s leadership believes the protocol itself still has life left. The proposed path forward shifts control to the Balancer Foundation and the protocol’s decentralized autonomous organization (DAO), marking a transition to a leaner, community-driven model.
Key proposals include eliminating BAL token emissions, restructuring fees to boost DAO revenue, and drastically reducing operational costs. The aim is to create a more sustainable system that aligns incentives with actual protocol performance.
Martinelli emphasized that Balancer has still been generating over $1 million in revenue over the past three months, arguing that the issue lies not in the product but in its economic design.
DAO members are now set to vote on restructuring and tokenomics changes that could determine whether Balancer can reinvent itself, or fade further into DeFi’s growing list of cautionary tales.
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