Balancer may close before vault runs out

Core Points

The final liquidation plan still needs to be voted on by token holders. Balancers manages treasury assets estimated to exceed $9 million. Eligible liquidity pools may switch to a withdrawal-only model in October. Redemption of BAL tokens will begin as early as May 2027. Funds recovered from vulnerability attacks will be reserved exclusively for affected liquidity providers (LPs).

Balancer spends more than it earns

Members of the Treasury Committee have proposed a plan for an orderly exit from Balancer, which requires governance voting. The plan aims to stop new development work, reduce the agreement to a limited withdrawal service, and then allocate remaining treasury assets to eligible BAL holders.

The proposal is based on a simple calculation: Balancer's monthly expenses are higher than revenue from agreements and treasury management. Monthly costs are approximately $150,000, while August agreed revenue was approximately $30,000. Treasury management brings in approximately $25,000 in monthly revenue, but it still causes DAO expenses to exceed revenue.

Balancer has previously tried to achieve profitability by reducing costs, simplifying the token model, and driving growth in newer v3 products. The proposal states that these efforts failed to generate enough continuing revenue to replace the gains of older versions of the v2 protocol. The authors of the proposal believe that setting a cap on the exit budget is preferable to allowing operating costs to continue in the absence of a clear path to profit.

Proposed transition starts with withdrawals

No changes will take effect unless the BAL holder approves the proposal. If approved, Balancer will enter an exit period first rather than close immediately.

• Before October 30, 2026: LP will receive an exit window and access the withdrawal guide.
• Starting from October 30, 2026: Suspend pools will be switched to "withdrawal only" mode, and the vulnerability reward program will end.
• End of May 2027: The first round of proposed BAL vault redemption channel opens.
• End of November 2027: The six-month redemption window for the first round is closed.

Balancer does not hold LP assets as it holds customer deposits like a centralized exchange. Even if the organization stops maintaining its regular interface, users can still make withdrawals through contracts. Pools that cannot be suspended may remain active, and the agreement fee will be set to zero if the contract allows it.

Different holders follow different paths

The proposed allocation process is not a single process that applies to all Balancer users. Liquidity providers need to consider the withdrawal paths of their pools, while BAL holders and packaging token holders face subsequent redemption rules and separate deadlines.

Impact of the proposal on various groups

Liquidity Providers

Review the withdrawal path of the pool. Eligible pools may switch to supporting withdrawals only from October 30, while other pools may continue to operate in accordance with contract rules.

Ordinary BAL holders

pay attention to the opening snapshot announcement and then redeem it within six months of the proposed first round by destroying BAL in exchange for a proportional proportion of physical shares in the treasury.

veBAL holders

expect the existing lock-up period to expire before the first round. Holders need to convert positions in the 80/20 BAL/WETH pool to BAL before redemption.

auraBAL and sdBAL holders

These positions need to be untied through their respective agreements and converted to BAL before the first round deadline.

Money recovered by LPs

affected by the vulnerability does not participate in the allocation of BAL holders, but is allocated specifically to the affected pool.

If auraBAL or sdBAL is not converted to a BAL holder before the end of the first round, redemption will not be possible through Balancer's collection process. VeBAL holders who extend lock-in periods beyond the proposal date will also need to wait for the new lock-in period to end.

tetuBAL follows separate regulations because it is permanently locked. The proposal determines that the block when the forum post is published will be used as the ownership criterion for tetuBAL. These holders will receive half the amount of BAL measured behind their tetuBAL positions and redeem them through the same first-round process.

Participation in the first round of redemption will also determine subsequent allocations

The proposed first round is not the only payment method. After the six-month collection window closes, the second round of airdrops will be sent only to addresses redeemed in the first round. This includes unused exit funds, assets received after the first snapshot, and shares associated with unredeemed BAL.

There is no need for a separate collection operation for the second round. The final sweep six months later will also be sent to the same batch of first-round redeemors. For BAL holders, missing the first window may mean missing both the initial allocation and any subsequent gains that the DAO collects later.

The estimated value of the treasury is not a fixed value for BAL

The collection rules explain who is eligible to receive assets, but do not establish the value of each BAL. The $9 million figure is an estimate of the managed treasury at current prices, and other DAO wallets, positions and receivables are still being counted.

The amount available for distribution will be determined during the first opening round, when the DAO will complete asset counts and audits. It may change due to fluctuations in token prices, accounts receivable recoveries, funds recognized as owned by third parties, and the cost of completing the exit process.

The plan has set aside up to US$400,000 from November 1: US$150,000 will be used until May 2027, US$30,000 will be used for subsequent allocation processes, and US$220,000 will be used as reserves when necessary. The proposal argues that setting an exit budget cap is easier to rationalize than unlimited operating expenses based on the current cost of $150,000 per month. Any unspent amounts will be returned to the allocation pool.

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Exploited funds must be stored separately

Funds recovered from attacks on Balancer may be stored at addresses controlled by the DAO, but the proposal states that they are not part of general vaults. They belong to the LPs of the affected pool and need to be identified and eliminated before the vault snapshot.

Recovery efforts will continue to be conducted through private detectives and law enforcement. Any further funds recovered will be handed over to the affected LPs rather than added to the allocation of BAL holders.

Voting concerns Balancer's remaining runway

Voting requires BAL holders to choose between retaining a stand-alone agreement with uncertain revenue paths, or accepting a structured exit while the treasury can still fund the exit. Before Snapshot voted to approve the proposal, Balancer's pool, treasury assets and operations remained under current governance arrangements.