Balancer Holders Approve Protocol Wind-Down, Reject Official Fork Proposal

Balancer token holders have approved a proposal to wind down the decentralized finance liquidity protocol and distribute its treasury to BAL holders, while rejecting a separate plan to fund an official fork of the platform. The split outcome separates a decision to end operations from a decision to continue them under new leadership.

“BIP-928 passed and BIP-929, the fork proposal, did not,” Balancer said on Sept. 29. “Pools keep working as usual until October 30th, and withdrawals stay open the whole way through.”

Both Snapshot votes — off-chain, token-weighted tallies on a governance platform widely used across decentralized finance — closed on Sept. 29 at 2 p.m. ET. BIP-928, the wind-down proposal, drew 17.23 million BAL in voting power across 42 votes, with its two yes options taking a combined 99.2% of the total. BIP-929 attracted 17.33 million BAL across 51 votes, with 69.9% of voting power cast against it. Both votes exceeded the 5 million BAL quorum, the minimum participation required for the results to count. Percentages reflect voting power, calculated from Snapshot's final tallies.

The rejected fork proposal would have placed MAXYZ in charge of a successor protocol under a new name, seeded it with non-circulating BAL, and delayed pool pauses until the second quarter of 2027. Its defeat leaves the earlier exit schedule in place.

Turnaround Attempt Ends

The wind-down plan, introduced Sept. 14 as a Balancer Improvement Proposal (BIP), ends an attempted turnaround. According to BIP-928, monthly operating costs stood at about $150,000, against roughly $30,000 in protocol revenue in August, down from $97,000 in June — leaving August costs running about five times revenue. The proposal also cancels the earlier BIP-919 buyback, which was capped at 35% of the treasury as measured at that vote.

Balancer still held about $58.5 million in total value locked as of Sept. 29, according to DefiLlama.

Pool Exits Stay Open

Under the approved BIP-928 plan, pausable pools will move to withdrawals-only mode on Oct. 30, except for requested v3 extensions through Nov. 30. Pools that cannot be paused will keep operating, with protocol fees set to zero where the contracts permit.

Partners must request extensions by Oct. 16. Bug bounty coverage ends Oct. 30, even for pools that stay live longer. Withdrawal guides and pool-specific treatment are due before that transition, and exits remain available through the non-custodial contracts without depending on Balancer continuing to operate.

Burn BAL for Treasury Assets

A Sept. 20 update and accompanying inventory from proposal author Marcus put distributable non-BAL assets at approximately $9.96 million, based on Sept. 18 balances and prices. That unaudited estimate excludes the separately held wind-down budget. The final distribution base will be measured and audited when the first redemption round opens, meaning the payout is not a fixed dollar amount.

Starting at the end of May 2027, holders will be able to burn BAL in exchange for a proportional share the tokens held in the treasury. The claim window lasts six months, through the end of November 2027. An opening snapshot will fix eligibility and the redeemable supply, excluding DAO-held BAL and permanently locked Tetu backing while adding the BAL allocated to tetuBAL holders.

Voters chose to give tetuBAL holders treasury BAL equal to 50% of their measured backing rather than 100%. That option received 12.18 million BAL in voting power versus 4.91 million for full treatment; about 139,573 BAL voted against the wind-down. The tetuBAL holder set and backing measurement are fixed at the proposal's posting block.

Existing veBAL — Balancer's vote-escrowed BAL — will unwind into BAL/WETH pool tokens, which holders must exit to obtain BAL. Holders using auraBAL or sdBAL, liquid veBAL wrappers issued on the Aura and Stake DAO platforms, must unwind their positions on those protocols' calendars before the redemption window closes.

A second round will distribute unspent budget, later receipts and unclaimed shares to addresses that redeemed in round one, within two months of its close. A final sweep follows six months later. Holders who miss round one receive no share in round two. Funds recovered from attacks remain reserved for affected liquidity providers, outside the BAL-holder distribution.

The approved wind-down budget from Nov. 1 totals up to $400,000, including a $220,000 reserve drawn only if needed. The Treasury Council remains the signer, with the Foundation executing distributions and closing last. An implementation specification is due by the end of February 2027, and the claim contract must be audited before redemptions open.

Balancer's Shrinking Liquidity and Its Fee-First Reset

Balancer's March reset proposal sought to replace token-subsidized liquidity with organic fee income. BIP-919 proposed stopping BAL emissions and cutting the protocol's share of v3 swap fees from 50% to 25%, explicitly warning that incentive-dependent liquidity could leave. Preserving maximum TVL was not the same objective as making the protocol sustainable.

Total-protocol TVL fell 93.6% from Sept. 28, 2025, to Sept. 29, 2026, and 58.8% from March 30 to Sept. 29, according to The Defiant's calculations using DefiLlama. That trajectory does not establish that the reset caused withdrawals: dollar-valued TVL reflects both asset prices and holdings. The later wind-down case rested on revenue failing to cover operating costs, not liquidity size alone.