Five months after a $128M exploit rocked the protocol, Balancer is proposing its most radical restructuring yet.
The team behind veteran DeFi protocol Balancer has posted two sweeping governance proposals that would wind down Balancer Labs, consolidate all operations under a DAO-controlled entity, and end BAL token emissions entirely.
The operational restructuring proposal, posted on March 23, formalizes the wind-down of Balancer Labs OÜ, the Estonian entity that originally built the protocol, and consolidates all activity under Balancer OpCo Limited, a BVI entity that operates as a direct agent of the DAO.
The team would shrink from roughly 25 to 12.5 full-time equivalents, with an annual operating budget of $1.9 million — a 34% cut from the $2.87 million approved under the previous roadmap.
The accompanying tokenomics revamp proposal, also published on Monday, goes further. It proposes halting all BAL emissions immediately, sunsetting veBAL — the protocol’s governance and yield-bearing token — and routing 100% of protocol fees to the DAO treasury. The move would replace a fragmented split that previously flowed to veBAL holders, core pool incentives, and partners.
To soften the blow for locked veBAL holders, the proposal includes a $500,000 compensation campaign paid in stablecoins over six months. The proposal also offers a BAL buyback and burn program capped at 35% of treasury holdings, or roughly $3.6 million, at net asset value (~$0.16 per BAL) — a slight premium to current market prices that would retire approximately 35% of circulating supply if fully exercised. The buyback and burn program is aimed at “providing exit liquidity for holders who want out.”
The projected impact, per the proposal, includes reducing Balancer’s annual deficit from ~$2.6 million to ~$700,000, and extending its treasury runway from under four years to roughly nine.
In an extended X post following the proposals, Marcus Hardt, CEO and co-founder of Balancer Labs, framed the moves as a necessary reckoning. “The technology works. Balancer v3 works. Boosted pools work. The infrastructure we built is strong,” he wrote. “What stopped working was the economic model around it.”
Hardt acknowledged the pain for veBAL holders directly:
November Exploit
The restructuring comes as Balancer tries to find stable footing after a brutal stretch. The protocol was hit by a $128 million exploit in early November, the same week that Stream’s unwind shook broader confidence in DeFi. The proposals acknowledge that the November exploit “removed the option of growing out of” problems with the economic model that had been building for some time.
The exploit triggered months of crisis response, significant TVL loss, and difficult decisions about what the protocol could realistically sustain. The current restructuring proposals are the clearest signal yet of just how much the event reshaped Balancer’s trajectory.
Despite the severity of the changes, Hardt struck a cautiously optimistic tone. “Balancer still has real products. Boosted pools are generating real usage,” he wrote on X. “I believe the protocol still has room to build products and revenue streams that fit Balancer uniquely well.”
Both proposals are live on the governance forum and open for community discussion ahead of a snapshot vote.
BAL is mostly flat on the news, down less than 1% in the past 24 hours, and over 99% from its 2021 all-time hight.
Labs vs DAO Restructuring
Balancer’s restructuring is the latest in a string of high-profile governance crises forcing DeFi projects to confront whether the Labs-plus-DAO structure — once a standard template for decentralized protocols — is still fit for purpose. At Aave, months of escalating conflict between Aave Labs and the DAO over fee distribution, brand ownership, and token-holder rights eventually pushed Labs to propose routing 100% of product revenue to the DAO treasury — though not before key service provider BGD Labs announced it was leaving amid the fallout.
Meanwhile, cross-chain bridge protocol Across took an even more radical turn, with Risk Labs proposing to dissolve the DAO entirely and convert the project into a U.S. C-corporation, citing friction with institutional partners.
This article was written with the assistance of AI workflows. All our stories are curated, edited and fact-checked by a human.
Source: https://thedefiant.io/news/defi/balancer-proposes-labs-shutdown-bal-tokenomics-shift
