Balancer Labs, the company behind the Balancer decentralized finance protocol, is shutting down due to financial strain and fallout from a $116 million hack in November. Founder Fernando Martinelli stated the corporate entity had become a liability, operating without revenue. Executives propose transitioning protocol governance to the Balancer Foundation and DAO under a leaner, cost-effective model, with votes pending on operational restructuring and tokenomics changes. The protocol’s total value locked has plummeted from a peak of $3.3 billion to $158 million.
Balancer Labs is winding down operations after mounting financial pressure and a $116 million security exploit last November. Founder Fernando Martinelli stated the decision was made because the labs had become a “liability rather than an asset to the protocol.” CEO Marcus Hardt added the company spent too much to attract liquidity relative to protocol revenue, diluting Balancer (BAL) token holders.
The protocol’s total value locked peaked at $3.3 billion in November 2021 but fell to $800 million by October 2025. The hack precipitated a further $500 million drop in TVL over two weeks, with the figure now at $158 million. Martinelli said the exploit created ongoing legal exposure, making it unsustainable to maintain a corporate entity carrying that liability.
Moving forward, Hardt and Martinelli are pushing for the protocol’s future to be managed by the Balancer Foundation and its decentralized autonomous organization. Martinelli advocated for a “lean continuation path,” which involves cutting BAL emissions to zero and restructuring fees so the DAO captures more revenue.
“Balancer still has real value to build from here. If we can make this transition work, we have a real chance to build a stronger and more sustainable protocol on the other side of it,” Hardt said. The DAO is set to vote on proposals for operational restructuring and BAL tokenomics changes.
Martinelli noted the protocol generated over $1 million in revenue across the past three months. “That’s not nothing — that’s a functioning protocol buried under a broken tokenomics model and an overweight cost structure,” he stated, adding, “The problem isn’t that Balancer doesn’t work. The problem is that the economics around Balancer aren’t working. Those are fixable.”
