Balancer Labs, a prime player in the decentralized finance landscape, has announced the cessation of its traditional company operations. Co-founder Fernando Martinelli cited the cumbersome nature of maintaining a corporate structure that has become more of a hindrance than an asset for the protocol’s future growth. This decision comes in the wake of a significant security breach in November 2025, which saw a loss of around $110 million in digital assets, thrusting the organization into legal challenges.
What Spurred the Shutdown of Balancer Labs?
Fernando Martinelli, a notable figure in the decentralized finance realm, emphasized that without monetization, the current corporate frame could not sustain itself. He revealed that rather than scrapping the Balancer protocol entirely—since it still generates some revenue—a stripped-down model was the preferred route. This predicament traces back to a major security breach that disrupted the company’s stability and slumped its revenue prospects.
The once-prominent Balancer protocol, which soared during DeFi’s boom period in 2021 with its pioneering automated market maker system, has faced stark declines. From handling billions, its total value now hovers under a few hundred million, and the market value of its BAL token has slumped to about $0.15, a shadow of its peak performance.
How Will Revenue and Governance Change?
The remaining Balancer team has presented a comprehensive plan to navigate the company through this transformation. The makeover suggests halting BAL emissions altogether, disbanding the current governance model, and redirecting all earnings to the DAO treasury, which previously received only a fraction of these proceeds, about 17.5%.
If you believe in the restructured Balancer, you’re invited to stay. If not, a fair exit will be available.
The plan also includes slashing v3 protocol shares to 25% in efforts to foster organic liquidity growth, alongside a buyback initiative for stakeholders wishing to exit. According to Martinelli, this ensures loyal supporters can stay, while others find an equitable exit route.
Key staff within the company are likely to persist under a newly established Balancer OpCo structure, subject to community consent. Although Martinelli will retire from formal duties, he remains open to offering advisory support. Product innovation will concentrate on a limited array of pool types and engage with non-EVM networks.
Despite generating over $1 million annually from fees recently, the protocol could not underwrite the full extent of its corporate construct. However, Balancer’s core still offers a formidable platform for leaner operations. It’s the corporate dimension that will be winding down, not the protocol itself.
