DeFi Pioneer Balancer Considers Shutdown After Massive Hack

Decentralized finance veteran Balancer is weighing a complete shutdown of its protocol. Marcus Hardt, CEO of Balancer Labs, put forward a governance proposal suggesting a phased sunset for the project. The move comes after months of trying to return to profitability following a major exploit last year that drained nearly $130 million from the protocol. Despite successful cost cuts, the team could not turn things around into sustained revenue growth.

Launched during the explosive DeFi summer of 2020, Balancer brought multi asset pools and custom weighting to the automated market maker scene. Its technology became a popular foundation for dozens of other protocols across multiple blockchains. At its peak in late 2021, the total value locked on the platform crossed $3 billion. That figure sits much lower today at around $58 million, weighed down by security incidents including a recent exploit on legacy v1 contracts.

Under the new proposal, the remaining $9 million treasury would go directly to BAL token holders on a pro rata basis. Pools would shift to a withdrawal only mode by October 30. A Snapshot vote is scheduled to take place from September 25 to September 29. Traders should monitor the governance vote closely to see how the community decides to handle the final chapters of this once dominant DeFi project.