Balancer, one of DeFi’s oldest AMMs, is facing the possibility of a complete shutdown. Marcus, a core contributor to the project, has posted proposal BIP-XXX on the governance forum calling for a halt to all new development, the closure of the DAO, and the pro rata distribution of funds to BAL holders. The treasury currently holds at least $9 million based on prevailing token prices.

Why Choose to Shut Down?

This proposal does not stem from a sudden crisis, but is rather the result of repeated attempts at restructuring that failed to deliver. In April 2026, BAL holders approved a restructuring plan: cutting costs, halting token emissions, simplifying the tokenomics model, and routing protocol revenue to the DAO. The team executed this, launching version V3, which has functioned as designed.

However, the results fell short of expectations. The majority of revenue still comes from V2, while V3 revenue has not grown enough to replace it. August revenue dropped to around $30,000, a steep decline from $97,000 in June. Meanwhile, monthly operating expenses hover around $150,000. The gap between costs and revenue continues to widen, and the treasury is being depleted each month waiting for an outcome that has not materialized.

In addition, the November 2025 exploit targeting older V2 pools left lingering fallout for the protocol. Although V3 features a completely different architecture, the Balancer brand has carried a stigma in discussions ever since, making it harder to attract new users. Marcus wrote: “With a working product suite, a lean structure, and full effort from those who stayed, the adoption the plan required did not arrive. I see no funded path that changes this picture.”

How the Treasury Would Be Distributed

The proposal details a treasury distribution across two rounds with a final sweep:

  • Round one opens in late May 2027, after all current veBAL locks have expired. Holders burn BAL and receive their pro rata share of the exact tokens held by the treasury without further conversion into BAL. The claim period lasts 6 months, ending in late November 2027. Any address that does not claim in round one will not be eligible for round two.

  • Round two will be an automatic airdrop to addresses that claimed in round one, proportional to the shares they claimed. This includes: unspent budget, newly arrived revenue (fees from pools running prior to pausing, recoveries), and unclaimed amounts from round one. This takes place over 2 months after round one closes.

  • The final sweep occurs 6 months after round two, distributing everything remaining to the same addresses at the same proportions. The process concludes there.

Timeline and Costs

The proposal also outlines a specific timeline:

  • September 15: Forum post published and exit window opens.

  • September 25–29: Snapshot voting.

  • October 30: Transition pools to withdrawal-only mode.

  • November 1: Liquidation budget begins.

  • Late May 2027: Round one claim window opens.

The total liquidation budget is $400,000. Any unspent funds will return to the treasury and be included in the distribution.

The proposal also repeals BIP-919 (the NAV-based BAL buyback plan), replacing it with a direct treasury distribution mechanism.

Community Reactions

The proposal received mixed reactions. Many argued that shutting down would be a major mistake, suggesting an alternative partnership with WiseSoft to address revenue issues immediately. Community members also suggested launching equity pools (Nasdaq, Nvidia, Google, Apple) on Robinhood’s chain instead of shutting down.

Marcus also revealed in the proposal that contributors are working on a separate proposal to keep the infrastructure alive under a new brand, and that he supports it as a fork. However, that proposal will be posted separately and decided on its own merits.

If the proposal fails to pass, the current framework remains in place: BIP-918 and its budget, the scheduled BIP-919 buybacks, BIP-687 bounties, and contracts will stay operational. However, Marcus made it clear: he will not spearhead any continuation plan, and any alternative path must go through the same governance process, priced and staffed by its proposer.

For BAL holders, this is a pivotal decision: recover the treasury while it remains substantial (at least $9 million), or continue spending on a path that has been tested without success. The Snapshot vote scheduled for September 25–29 will provide the answer.