Balancer Considers Winding Down Protocol Amid Ongoing Adoption Challenges

Balancer, a decentralized exchange and automated market maker, is considering winding down its protocol after restructuring efforts failed to generate enough revenue. According to Balancer Labs CEO Marcus Hardt, the November exploit that affected composable stable pools on its legacy v2 protocol weighed heavily on adoption.

The proposal for an orderly wind-down of the protocol was published on the Balancer governance forum, calling for the distribution of the remaining treasury, worth over $9 million, to BAL tokenholders. The treasury will be distributed in three phases: the first in May 2027, when holders can burn their BAL tokens in exchange for their share of the treasury assets.

The proposal comes after Balancer Labs shut down in March and continued operating under a leaner structure. However, Hardt admitted that while the restructuring was successful in cutting costs and delivering promised products to tokenholders, it failed to generate enough revenue. Revenue fell from $1.13 million in October 2025 to $371,000 in November, with August 2026 revenue at just $56,781.

Hardt stated that he underestimated the impact of the exploit on adoption and that the protocol's v3 architecture has not yet replaced the legacy v2 protocol's revenue. The proposal requires approval from BAL holders, with a snapshot vote scheduled for September 25 to 29.