Balancer Proposes Shutdown Following $130 Million Hack and Revenue Decline

Balancer, once a leading name in the decentralized finance (DeFi) sector, is contemplating an orderly shutdown following a devastating hack that resulted in losses of approximately $130 million. The proposal, posted by CEO Marcus Hardt on the project's governance forum, suggests a phased wind down of the protocol due to ongoing challenges in achieving profitability.

Since its peak in November 2021, when it boasted over $3 billion in total value locked (TVL), Balancer's TVL has plummeted to around $58 million. The decline is attributed to a broader contraction in DeFi activity and the lingering effects of the November 2025 exploit that severely impacted user confidence.

Hardt's proposal includes distributing Balancer's $9 million treasury to BAL token holders on a pro-rata basis. A vote on this proposal is scheduled to take place from September 25 to September 29. If approved, all pools will transition to withdrawal-only mode by October 30, with further discussions on the fate of DAO-owned assets to follow.

Despite efforts to restructure and cut costs, including reducing the team size and redirecting protocol fees, Balancer has struggled to generate sufficient revenue. Hardt noted that the recovery plan's cost-cutting measures were successful, but revenue growth remained elusive. The project's v3 protocol, which was expected to revitalize the platform, failed to attract the necessary adoption.

The proposal reflects a growing trend in the DeFi space, where several prominent projects have recently shut down or pivoted their operations. Balancer's potential closure raises questions about the future of its technology and the remaining liquidity providers, who may face a challenging exit process.