Balancer Labs, the company behind the DeFi protocol Balancer, is planning to close down to reduce expenses after facing financial difficulties. The protocol itself will continue to operate, but with a smaller team managed by the Balancer Foundation and its community (the DAO).
Summary
- Balancer Labs will shut down as the protocol shifts toward DAO and foundation management.
- The November hack and falling TVL increased financial pressure across the Balancer ecosystem.
- Executives want lower costs, zero BAL emissions, and more revenue flowing to the DAO.
Balancer co-founder Fernando Martinelli announced the closure of Balancer Labs after assessing the project’s current situation. He explained that the company had become more of a risk than a benefit to the Balancer protocol, largely due to potential legal issues stemming from the security breach in November 2025.
According to Balancer Labs CEO Marcus Hardt, the company was spending more money to attract users than it was earning. He explained this was negatively impacting BAL token holders and wasn’t a sustainable strategy.
Hack and liquidity drop increased pressure
Balancer was a popular DeFi platform during the 2020-2021 crypto boom. In November 2021, it held around $3.3 billion worth of assets, but that value decreased significantly in the years that followed.
Following a security breach in November 2025 that resulted in over $100 million in losses, Balancer faced increasing difficulties. The protocol’s total value locked (TVL) had already decreased to around $800 million by October 2025, and then plummeted another $500 million in the two weeks following the hack. Current estimates now place Balancer’s TVL at approximately $158 million.
As we move forward, Hardt and Martinelli envision the Balancer Foundation and the DAO taking the lead with the protocol’s direction. Their proposed model focuses on streamlining operations – reducing costs and minimizing the team involved in the daily running of things. It’s about building a more efficient and sustainable system.
Martinelli also supports updates to how the BAL token works and how funds are managed. These changes include stopping the creation of new BAL tokens and modifying fees to allow the DAO to retain a larger portion of the protocol’s earnings. DAO members are currently voting on proposals related to these changes and the overall design of the BAL token.
Protocol revenue remains part of the case
Despite recent challenges, Balancer is still generating income, according to Martinelli. The platform has earned over $1 million in the last three months, and he believes it’s fundamentally sound, but is currently struggling with financial issues and high operating costs.
This role is now central to the ongoing restructuring. The system will keep running, but with a streamlined and more affordable design focused on the DAO and foundation, instead of relying on Balancer Labs.
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2026-03-24 12:20