Balancer’s corporate entity is dissolving to shed legal liability from last November’s exploit, while the protocol restructures under a DAO model with new fee distribution and a BAL buyback.
Posted March 24, 2026 at 7:16 am EST.
Balancer Labs, the corporate entity behind one of DeFi’s original automated market makers, announced Monday it is dissolving rather than continuing to absorb the legal fallout from a $128 million exploit that drained its V2 pools last November. The protocol itself will remain online.
Co-founder Fernando Martinelli framed the move as an act of stewardship rather than failure. The November 3 exploit stemmed from a rounding flaw in Balancer V2’s swap logic and created, in Martinelli’s words, “real and ongoing legal exposure” for the corporate entity. With no revenue to offset those liabilities, he argued that keeping the company intact would burden the protocol’s future rather than support it.
The restructuring strips the protocol to its most functional core. BAL token emissions end, the veBAL governance model winds down, and the DAO treasury will capture 100% of protocol fees, up from 17.5% previously. The DAO will also fund a BAL buyback to give tokenholders exit liquidity. Core staff are expected to transition to a new entity called Balancer OpCo, subject to a governance vote, focusing development on reCLAMM pools, liquidity bootstrapping pools, stablecoin and LST pools, and weighted pools across fewer chains.
This story is an excerpt from the Unchained Daily newsletter.
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The announcement puts numbers to how far the protocol has fallen. Balancer held nearly $3.5 billion in TVL at its 2021 peak and now holds $157 million, a 95% decline. BAL trades around $0.16, down 88% from its all-time high, giving the protocol a market cap of roughly $10 million against annualized protocol fees of about $1 million. Martinelli said the technology had not failed, but “the economic model wrapped around it” had.
Whether the stripped-down structure is enough to compete against Uniswap v4 and Curve, both of which have deepened their liquidity advantages while Balancer contracted, remains the central question for any holder considering staying.
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