The company that built decentralized finance (DeFi) powerhouse Balancer is shutting down.
Balancer co-founder Fernando Martinelli announced on Tuesday that Balancer Labs, the corporate entity that incubated and funded the decentralized exchange protocol, will shut down.
The decision comes about five months after a v2 exploit in November 2025 that drained about $110 million in digital assets, as CoinDesk first reported, including osETH, WETH and wstETH, the third known security breach for the project and the one that created the legal exposure Martinelli cited as the reason for shutting down BLabs.
“BLabs as a company has become a liability rather than an asset for the future of the protocol and is just not sustainable as it is without any revenue streams,” Martinelli wrote in a post on a governance forum.
Martinelli added that he was “seriously considering” shutting everything down completely. But he stopped short of calling for a full shutdown because the protocol still generates revenue.
Balancer was one of the defining names of the DeFi boom. At its peak in late 2021, the protocol held nearly $3.5 billion in total value locked up, putting it alongside Aave, Uniswap, and Curve as foundational infrastructure for decentralized trading.
DeFiLlama data shows TVL at $2.96 billion in October 2021, with fees in excess of $6 million annually. But TVL now sits at $157 million, down 95% from its peak.
The market value has fallen to 10 million dollars. BAL trades at $0.16 against a fully diluted valuation of $11 million, meaning it trades well below intrinsic value.
Balancer generated over $1 million in annual fees over the past three months. It’s not enough to sustain the current operation, but it’s enough to sustain a much leaner one.
The restructuring plan proposed by the remaining team is aggressive. BAL emissions would be cut to zero, ending what Martinelli described as a “circular bribery economy that costs more than it generates.”
The veBAL governance model, which he said was trapped by meta-governance protocols like Aura and bribery markets that made voting “unrepresentative of the actual Balancer frontline,” would be phased out.
Protocol fees will be restructured so that the DAO treasury takes 100% of revenue instead of the current 17.5%. The V3 protocol share would drop to 25% to attract organic liquidity. And a BAL buyback would offer holders exit liquidity at a reasonable price.
“If you believe in the restructured Balancer, you stay. If you don’t, you get a fair exit,” Martinelli wrote. “It’s fair trade and it removes the overhang.”
Significant BLabs team members will be absorbed into Balancer OpCo pending a management vote. Martinelli himself will have no formal relationship with the protocol after the settlement, but offered to act as an adviser.
The product scope has been narrowed down to five areas where the team sees differentiation: reCLAMM pools, liquidity bootstrapping pools, stablecoin and liquid staking token pools, weighted pools, and expansion to non-EVM chains. Everything else gets cut.
BAL was trading at $0.72 as of Tuesday morning, down about 88% from its all-time high.
