After months of financial strain triggered by the massive $116 million hack in November, Balancer Labs has decided to wind down operations.
In a candid announcement on Monday, co-founder Fernando Martinelli said, “After careful consideration, I have decided to wind down Balancer Labs. This is not a decision I take lightly.”
He explained that Balancer Labs has turned into more of a liability than an asset for the protocol. With zero revenue coming in, keeping the corporate structure alive simply wasn’t sustainable anymore.
CEO Marcus Hardt pointed out that the team had been spending heavily to attract liquidity, but the returns didn’t justify the cost.
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Balancer Labs was once a shining star of DeFi. During the 2020–2021 bull run, it soared to a peak TVL of $3.3 billion. Fast forward to today, and that number has crashed hard. By October 2025 it had already slipped to $800 million.
The November hack wiped out another $500 million in TVL within two weeks, and now the protocol sits at just $158 million locked, a painful reminder of how difficult recovery is after a major exploit.
The hack didn’t just drain funds; it created serious ongoing legal exposure. Martinelli made it clear that continuing to operate Balancer Labs as a company carrying that risk wasn’t viable long-term.
Balancer Labs executives outline restructuring plan
Instead of letting everything collapse, Hardt and Martinelli are proposing a lean continuation path. They want to hand the reins over to the Balancer Foundation and the protocol’s DAO. The plan includes slashing BAL emissions to zero, redesigning fee structures so the DAO actually captures more revenue, shrinking the team dramatically, and slashing operating costs to the bone.
Balancer Labs still has real value to build from here,” Hardt said.
“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.”
The community now gets a say. Balancer DAO members have been asked to vote on two proposals that would reshape the protocol’s operations and BAL tokenomics.
Even with all the challenges, Martinelli pointed out that Balancer Labs is still generating real revenue, over $1 million in the past three months alone. “That’s not nothing,” he stressed.
“That’s a functioning protocol buried under a broken tokenomics model and an overweight cost structure. The problem isn’t that Balancer doesn’t work. The problem is that the economics around Balancer aren’t working. Those are fixable.”
