{"id":13267,"date":"2026-09-15T12:38:25","date_gmt":"2026-09-15T12:38:25","guid":{"rendered":"https:\/\/cryptonews.uk.com\/?p=13267"},"modified":"2026-09-15T12:38:25","modified_gmt":"2026-09-15T12:38:25","slug":"a-defi-giant-that-once-held-3-billion-is-now-proposing-to-wind-itself-down","status":"publish","type":"post","link":"https:\/\/cryptonews.uk.com\/?p=13267","title":{"rendered":"A DeFi giant that once held $3 billion is now proposing to wind itself down"},"content":{"rendered":"

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DeFi platform Balancer is proposing an orderly shutdown after a cost-cutting overhaul failed to revive revenue following last year\u2019s $128 million exploit.<\/p>\n

The decentralized exchange\u2019s Sept. 14 governance proposal would end new business development, begin winding down operations, and eventually distribute the remaining treasury to BAL holders. Token holders are scheduled to vote on the plan from Sept. 25 to Sept. 29.<\/p>\n

The proposal comes about six months after Balancer Labs, the corporate entity behind the protocol, closed following a Nov. 3, 2025 exploit that drained roughly $128 million from Balancer v2 pools across several blockchains.<\/p>\n

Data from DeFiLlama showed that Balancer once ranked among DeFi\u2019s largest trading venues, with more than $3 billion in total value locked at its 2021 peak. That figure has fallen to about $58 million, reflecting both a broader contraction in activity and the protocol\u2019s struggle to rebuild after the attack.<\/p>\n

Marcus Hardt, former Balancer Labs chief executive, said the DAO had already tried a narrower survival plan. Holders approved proposals in April that ended token emissions, redirected protocol fees to the treasury and cut operating costs while a smaller team focused on generating revenue from Balancer v3.<\/p>\n

The restructuring reduced the team from roughly 25 people to 12.5 full-time equivalents and cut the operating budget by about a third. But the commercial recovery never followed.<\/p>\n

\u201cThe product worked. It did not sell enough,\u201d Hardt said.<\/p>\n

Balancer\u2019s v3 bet failed to replace shrinking v2 revenue<\/h2>\n

The turnaround strategy centered on v3, including Boosted Pools and AutoRange Pools, formerly known as reCLAMM. Hardt said the latter was expected to help carry the protocol toward profitability after completing security work and reaching production.<\/p>\n

Balancer also kept pursuing integrations with other crypto projects. Some discussions progressed, but commitments remained smaller and slower than management had expected.<\/p>\n

Most protocol revenue still came from v2, while v3 failed to grow quickly enough to replace it.<\/p>\n

Hardt said the November exploit weighed more heavily on adoption than he initially expected. Prospective partners repeatedly raised the hack during commercial discussions, forcing the team to explain what had happened, how the protocol had changed and why v3 should be viewed differently.<\/p>\n

Many counterparties accepted those explanations, he said, but the damage still showed up in longer decision cycles and weaker commitments.<\/p>\n

By August, Hardt said he no longer saw a funded route that could support the level of development v3 needed.<\/p>\n

\u201cI do not see a funded path that changes this picture,\u201d he said, adding that continuing to spend treasury assets on a strategy already tested would be unfair to token holders.<\/p>\n