Balancer Labs, the driving force behind one of decentralized finance’s leading protocols, has announced it will cease operations. Co-founder Fernando Martinelli explained that keeping the company structure intact had become more of a burden than a benefit to the protocol’s future development. This move follows a major security breach in November 2025, which resulted in the loss of approximately $110 million in digital assets and triggered mounting legal pressures on the organization.
Security Breach Shakes Corporate Foundation
Fernando Martinelli, who is widely recognized within the DeFi sector for co-founding Balancer, has long been a familiar name in the space. Balancer earned its place as a core protocol alongside giants like Uniswap, Aave, and Curve during the explosive DeFi growth of 2021, with its innovative automated market maker model. However, recent security issues coupled with faltering revenue have seriously undermined the sustainability of the company’s corporate structure.
Martinelli emphasized that the company, in its current form, could no longer survive without generating income. Rather than providing the protocol with continued advantages, the corporate entity had become a liability. Fully shutting down Balancer was seriously considered, but since the protocol continues to generate revenue, leadership opted to explore a leaner operational model instead.
As a corporate entity, BLabs has become more of a liability than an asset for the future of the protocol and, without revenue streams, its current form is not sustainable.
At the height of DeFi’s golden age in late 2021, Balancer stood as a flagship project, with billions of dollars locked in its protocol. Yet over time, total value locked dropped substantially, falling below hundreds of millions. The BAL token’s market capitalization similarly dwindled, with its price lingering around $0.15—far from its all-time highs.
Emission Cuts and Governance Overhaul in New Roadmap
The remaining team has proposed a restructuring plan aiming to steer Balancer in a more focused and downsized direction. This overhaul would eliminate BAL emissions entirely, sunset the current BAL governance model, and direct all protocol revenue to the DAO treasury. Under the existing setup, the treasury received just 17.5 percent of protocol-generated income.
Within the framework, the share for the v3 protocol would be reduced to 25 percent to attract more organic liquidity. Additionally, a buyback mechanism is being considered to offer BAL holders a fair exit. Martinelli noted that supporters who believe in the new, restructured Balancer could choose to remain while those wishing to withdraw would have a reasonable means to do so.
If you believe in the restructured Balancer, you’re invited to stay. If not, a fair exit will be available.
Key employees holding critical roles within the company are expected to continue under the newly organized Balancer OpCo umbrella, pending community approval. Martinelli himself will step back from any formal position but remains open to supporting the project as an advisor. Product development will also narrow in scope, focusing only on select pool types and targeting expansion to non-EVM networks.
While the protocol has generated over $1 million in annualized fee revenue in the past three months, it has struggled to support the weight of its full corporate structure. Nonetheless, the underlying protocol still provides a foundation for a leaner organization. Ultimately, it is not the protocol itself but the company supporting it that is being phased out.
