Balancer Labs to shut down after $128 million exploit; protocol eyes ‘lean’ restructuring

Balancer Labs, the corporate entity behind the Balancer DeFi protocol, is ceasing operations following a $128 million exploit on November 3, 2025, which was caused by a rounding flaw in its swap logic. Co-founder Fernando Martinelli stated that the corporate entity became a liability carrying legal exposure from past security incidents, while the protocol itself needs to move forward unburdened.

This is not a complete shutdown of the protocol, which continues to generate over $1 million in annualized fees. Core team members are expected to transition to a new entity, Balancer OpCo, pending a governance vote. The proposed lean restructuring involves ending Balancer token (BAL) emissions, winding down the veBAL governance model, and redirecting 100% of protocol fees to the DAO treasury while reducing the V3 protocol share to 25%. Martinelli expressed belief that the protocol has a chance to achieve sustainability over the next crucial 12 months.

(Source：The Block)