Balancer Proposes Shutting Down and Returning Its $9 Million Treasury to BAL Holders

A proposal posted to Balancer's governance forum asks the DAO to cease active operations and distribute the protocol's managed treasury to BAL holders through a redemption mechanism that burns BAL. The post cancels a previously approved buyback and substitutes a two‑round redemption plus a final sweep, where redeemers surrender BAL to claim a pro‑rata share of the DAO's non‑BAL assets. The author of the proposal is Marcus Hardt, who joined Balancer's Treasury Council and certain multisigs as part of the April BIP‑918 restructuring.

Under the plan, round one opens at an audited snapshot block at the end of May 2027 and remains open for six months to the end of November 2027; eligible holders burn BAL and receive the DAO's other tokens in kind, with claims recorded on a contract. Round two would occur within two months after round one closes (end of January 2028) as an airdrop to addresses that participated in round one, covering unspent winddown funds, later arrivals, and unclaimed shares; addresses that skip round one would not be eligible. A final sweep six months after round two (end of July 2028) distributes any additional assets received by that date. The proposal excludes BAL itself from ordinary distribution, with a single exception for tetuBAL, and specifies how circulating supply is measured for share calculations per BIP‑919.

The submission asks for a winddown budget totaling $400,000: $150,000 from Nov. 1 to May 2027, $30,000 from then until the final sweep, and a $220,000 reserve to be used only if necessary. It also requires an implementation specification for the claim contract to be posted for comment by the end of February 2027 and audited before round one. Operational steps include pausing pausable pools on Oct. 30 and switching them to withdrawals‑only (with recovery mode enabled where needed), setting protocol fees to zero where contracts allow, and treating the frontend, routing and communications as discontinued from that date; bug bounty coverage would also end then. Contributors received two months' notice starting Aug. 27, and from Nov. 1 infrastructure would be reduced to a withdrawal interface, subgraph coverage and documentation kept available only to support the veBAL unlock path and distribution rounds.

The proposal frames the move as a response to persistent revenue shortfalls after the April BIP‑918 restructuring, which cut the operating budget and ended BAL emissions. It cites monthly protocol burn of about $150,000 versus roughly $30,000 in protocol revenue in August (down from $97,000 in June), and notes the treasury currently earns about $25,000 a month under kpk's management. The post also references the November 2025 exploit that drained more than $128 million from legacy v2 pools as a factor that hampered recovery, while saying the decision does not rest on that single event. If voters reject the plan, the existing BIP‑918 mandate, BIP‑919 buyback and bug bounty remain in place and contributors who wish to continue under the current mandate could pursue that path, including via a fork if desired.