Balancer co-founder to shut down Balancer Labs, shift to DAO model

Fernando Martinelli, co-founder of Balancer, announced that Balancer Labs will be shut down due to legal risks tied to the November 2025 exploit and the lack of sustainable revenue under its current structure.

The protocol will transition fully to a DAO, foundation, and service-provider model, eliminating the need for a centralized corporate entity. Core team members are expected to move into a new operational structure pending a governance vote.

Martinelli also backed major tokenomics changes, including ending BAL emissions, phasing out veBAL, and directing 100% of protocol fees to the DAO treasury to improve long-term sustainability.

Despite considering a full shutdown, he noted that Balancer continues to generate real revenue—over $1 million in annualized fees in the past three months—arguing that the issue lies in the economic model rather than the product itself.

Additional proposals include a BAL buyback to provide exit liquidity for holders and a tighter product focus on key offerings such as reCLAMM, LBPs, and core liquidity pools.

Following the wind-down of Balancer Labs, Martinelli will no longer hold a formal role but may remain involved as an advisor. He emphasized that the next 12 months will be critical in determining whether the protocol can successfully turn around.
$BAL