Co-founder of Balancer Labs, Marcus Hardt, announced the company's closure due to financial difficulties following a $128 million hack in November.
— Marcus | Balancer (@Marcus_Balancer) March 23, 2026
“The last few months have been incredibly tough. The attack, the prolonged crisis response, difficult decisions, and painful conversations about what was and what was no longer sustainable. We also had to say goodbye to people we deeply respected. Not because they were not good enough, but because the structure around the protocol no longer made sense. That is the crux of the issue,” he wrote.
Hardt stated that the firm had been overpaying for liquidity. The actual returns did not justify the costs. The dilution of BAL token holders was aimed at maintaining a system that no longer benefited the protocol.
Co-founder Fernando Martinelli added that Balancer Labs had become “more of a burden than an asset for the future of the protocol, and in its current form, it is simply unviable.”
He noted that the hack “created real and ongoing legal risks.” He deemed the continued existence of a corporate structure responsible for past incidents as untenable.
Future
Balancer Labs' management proposed transferring control of the Balancer protocol to the Balancer Foundation and a DAO. Hardt stated that the infrastructure is operational. The only issue lies in the economic model.
Key changes include:
- reducing BAL issuance to zero;
- restructuring fees to increase DAO revenues;
- maximizing team reductions and lowering operational costs.
“Balancer is still generating real revenue — over $1 million in the last three months. This is not zero. It is a functioning protocol buried under broken tokenomics and a heavy cost structure. The problem is not that Balancer doesn’t work. The problem is the economy surrounding it. This is fixable,” Martinelli emphasized.
DAO participants were invited to vote on two initiatives that propose potential changes in Balancer's operational restructuring and BAL tokenomics.
Hack and Consequences
At the peak of the bull market in 2020-2021, Balancer was among the leading DeFi protocols, with a TVL exceeding $3.3 billion.
By October 2025, this figure had dropped to $800 million. In November, the hack caused a further decline of $500 million in locked value within just two weeks. The current figure stands at $157.8 million.
Source: DefiLlama.Since its peak in 2021, the price of the native BAL token has plummeted by 99% — from $72 to $0.15. Market capitalization has fallen from $783 million to the current $9 million.
Source: CoinGecko.It is worth noting that the Balancer team proposed distributing around $8 million among community members affected by the hack.