Balancer Labs Shuts Down Following $128M Hack Fallout

Balancer Labs is officially shutting down. Co-founder Marcus Hardt made the announcement, pointing to severe financial strain caused by the November 2025 hack that drained $128 million from the protocol.

«The last few months have been incredibly tough» — Marcus Hardt (@Marcus_Balancer), original post

Why This Matters

Balancer was among the leading DeFi protocols during the 2020–2021 bull run, with its TVL exceeding $3.3 billion at peak. The dissolution of the development company behind it sends a stark warning across the decentralized finance industry, where exploits continue to undermine even the most established protocols. The Balancer protocol itself remains operational, but its future now rests entirely in the hands of its DAO community.

What Happened and Why the Company Couldn't Survive

According to Hardt, the months following the attack were marked by prolonged crisis management and painful decisions. The team had to part ways with valued members — not due to performance issues, but because "the structure around the protocol no longer made sense."

Hardt pointed out that the firm had been overspending on liquidity acquisition, with actual yields failing to justify the costs. Dilution of BAL token holders was propping up a system that no longer served the protocol's interests.

Fellow co-founder Fernando Martinelli described Balancer Labs as "more of a liability than an asset for the protocol's future," calling it unviable in its current form. He noted that the hack "created real and persisting legal risks," making it untenable to maintain a corporate structure bearing liability for past incidents.

Transition Plan to DAO Governance

The leadership proposed transferring protocol governance to the Balancer Foundation and DAO. Hardt confirmed that the infrastructure remains functional, with the only issue being the economic model.

Key restructuring measures include:

• Reducing BAL token emissions to zero;
• Restructuring fees to boost DAO revenue;
• Minimizing the team size and cutting operational costs.

Martinelli emphasized that the protocol still generates real revenue — over $1 million in the past three months. In his view, Balancer is a working protocol "buried under broken tokenomics and a heavy cost structure," and this problem is fixable.

DAO members have been asked to vote on two proposals addressing operational restructuring and changes to BAL tokenomics.

The Damage in Numbers

By October 2025, the protocol's TVL had already declined to $800 million. The November hack triggered an additional $500 million outflow in locked value within just two weeks. Current TVL stands at $157.8 million, according to DefiLlama.

The native BAL token has collapsed 99% from its 2021 all-time high, falling from $72 to $0.15. Market capitalization has shrunk from $783 million to $9 million, per CoinGecko data.

Previously, the Balancer team proposed distributing approximately $8 million to community members affected by the hack.