- Balancer Labs CEO Marcus Hardt has proposed a phased sunset of the protocol after recovery efforts failed.
- The proposal would distribute Balancer’s $9 million treasury to BAL holders pro-rata following a governance vote.
- The move follows a $130 million exploit last November, contributing to a TVL decline from $3 billion to $58 million.
Balancer Labs CEO Marcus Hardt has proposed an “orderly wind down” of the decentralized exchange, once a household name in DeFi. The proposal, posted to the project’s governance forum, suggests a “phased sunset of the protocol.”
The post explains that none of the efforts to return to profitability, employed after last year’s hack, “converted into sustained revenue growth.” Under Hardt’s proposal, Balancer’s $9 million treasury would be distributed to BAL holders pro-rata.
Launched in time for 2020’s “DeFi summer,” Balancer innovated on the two-asset automated market maker model used by Uniswap and Bancor. Its total value-locked peaked in November 2021 at over $3 billion, but now stands at just $58 million, according to DeFiLlama data.
The third iteration, v3, was hit by a devastating exploit in November last year, with losses totalling almost $130 million. Both before and since, the project experienced a handful of smaller security incidents.
Hardt proposes an “orderly wind down,” which would include stripping back the DAO as much as possible. The wind down would see all pools moved to withdrawal-only mode on October 30.
He “underestimated how much the exploit would continue to limit adoption,” which led to smaller sums deployed and hesitation from counterparties. He paid tribute to the team who kept v3 “safe,” “usable” and “alive,” during the “hardest year the protocol has had.”
Balancer’s decision comes as many other well-known DeFi projects opt to close down or take a substantial pivot. Last week, Harmony announced it would shut down its blockchain in response to “threats posed by state actors and AI agents.”
Popular DEX aggregator Odos Protocol shut down in July, and beleaguered lending platform Goldfinch threw in the towel the month prior. Just hours ago, CoinEx gave its users a three-month deadline to withdraw assets.
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