The company that built decentralized finance (DeFi) powerhouse Balancer is shutting down.
Balancer co-founder Fernando Martinelli announced on Tuesday the closure of Balancer Labs, the company that incubated and funded the decentralized exchange protocol.
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 cited by Martinelli as the reason for shutting down BLabs.
“BLabs, as a company, has become a liability rather than an asset to the future of the protocol and is simply not sustainable without any revenue stream,” Martinelli wrote in a governance forum post.
Martinelli added that he was “seriously considering” stopping everything altogether. But he did not call for a complete cessation 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 a total value locked of nearly $3.5 billion, placing it alongside Aave, Uniswap, and Curve as foundational infrastructure for decentralized commerce.
DeFiLlama data shows that TVL stood at $2.96 billion as of October 2021, with fees exceeding $6 million annualized. But the TVL now stands at $157 million, down 95% from the peak.
The market capitalization fell to $10 million. BAL is trading at $0.16 against a fully diluted valuation of $11 million, meaning it is trading well below NAV.
Balancer has produced over $1 million in annualized fees over the past three months. This is not enough to sustain the current operation, but it is enough to support another much lighter one.
The restructuring plan proposed by the remaining team is aggressive. BAL emissions would be reduced to zero, ending what Martinelli described as a “circular corruption economy that costs more than it generates.”
The veBAL governance model, which he said was captured by meta-governance protocols like Aura and bribe markets that made voting “unrepresentative of the actual Balancer frontline,” would be removed.
Protocol fees would be restructured so that the DAO treasury captures 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 provide holders with exit liquidity at a fair price.
“If you believe in the restructured Balancer, you stay. If you don’t, you get a fair exit,” Martinelli wrote. “It’s an honest transaction, and it eliminates the surplus.”
Core BLabs team members would be absorbed into Balancer OpCo pending a governance vote. Martinelli himself will have no formal relationship with the protocol after the liquidation, but has offered to serve as an advisor.
The scope of the product narrows down to five areas where the team sees differentiation: reCLAMM pools, liquidity seed pools, stable token and liquid staking pools, weighted pools, and expansion to non-EVM chains. Everything else is cut.
BAL was trading at $0.72 as of Tuesday morning, down about 88% from its all-time high.
