Balancer Labs is shutting down after mounting financial pressure and a $116 million exploit, with plans to transition the protocol to community-led management.
The move follows a steep decline in total value locked, which has fallen from $3.3 billion in 2021 to $158 million after the hack and ongoing outflows.
“After careful consideration, I have decided to wind down Balancer Labs,”
Said Balancer founder Fernando Martinelli.
Executives said the company had become financially unsustainable, citing high liquidity incentives and lack of revenue that diluted BAL token holders.
The proposed restructuring would shift control to the Balancer Foundation and DAO, while cutting BAL emissions, reducing costs and improving fee capture.
Despite challenges, the protocol has generated over $1 million in revenue in the past three months, suggesting underlying usage remains.
The transition reflects broader pressures in DeFi, where declining liquidity, security risks and weak tokenomics are forcing projects to restructure or shut down.
At the time of reporting, Balancer price was $0.1543.