Balancer token holders have voted to wind down the DeFi liquidity protocol and distribute its treasury to BAL holders, while rejecting a competing proposal that would have financed an official fork under new leadership.

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

Both Snapshot votes closed Sept. 29 at 2 p.m. ET. BIP-928, the wind-down plan, drew 17.23 million BAL in voting power across 42 votes, with its two yes options taking a combined 99.2%. BIP-929, the fork proposal, drew 17.33 million BAL across 51 votes, with 69.9% voting against. Both proposals exceeded the 5 million BAL quorum. Percentages reflect voting power based on 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 original exit schedule intact.

A Turnaround That Failed

The wind-down plan, introduced Sept. 14, ends an attempted turnaround. BIP-928 states that monthly operating costs ran about $150,000 against roughly $30,000 in protocol revenue in August, down from $97,000 in June. The plan also cancels the earlier BIP-919 buyback, which was capped at 35% of the treasury measured at that vote.

Balancer still held about $58.5 million in total value locked as of Sept. 29, according to DefiLlama. Under the approved plan, pausable pools move to withdrawals-only on Oct. 30, except for requested v3 extensions through Nov. 30. Pools that cannot be paused keep operating, with protocol fees set to zero where contracts permit.

Partners must request extensions by Oct. 16. Bug bounty coverage ends Oct. 30, even for pools that remain live longer. Withdrawal guides and pool-specific treatment are due before the transition, and exits remain available through the non-custodial contracts without depending on Balancer continuing to operate — a structural feature that limits counterparty risk for remaining liquidity providers during the shutdown.

Redemption Mechanics

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

Starting at the end of May 2027, holders can burn BAL for a proportional share of the tokens the treasury holds. The claim window lasts six months, closing at the end of November 2027. The opening snapshot fixes eligibility and redeemable supply, excluding DAO-held BAL and permanently locked Tetu backing while adding BAL allocated to tetuBAL holders.

Voters opted 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 outright. The tetuBAL holder set and backing measurement are fixed at the proposal's posting block.

Existing veBAL locks unwind into BAL/WETH pool tokens, which holders must exit to obtain BAL. Holders using auraBAL or sdBAL must unwind on those protocols' calendars before the redemption window closes.

A second round distributes 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 past exploits remain reserved for affected liquidity providers and sit 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.

Context of Contraction

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. The wind-down case ultimately rested on revenue failing to cover operating costs, not on liquidity size alone.

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 calculations using DefiLlama data. That trajectory does not establish that the reset caused withdrawals, since dollar-valued TVL reflects both asset prices and holdings.

The next hard deadline for integrations is Oct. 16, when partner extension requests close, followed by the Oct. 30 transition of pausable pools to withdrawals-only. An implementation specification is due by the end of February 2027, and the claim contract must be audited before redemptions open.