Balancer Overhauls Tokenomics After $116M Hack, Ends Emissions to Stabilize BAL and Restore Sustainability

Balancer, one of DeFi's longest-running protocols, has announced a radical overhaul of its tokenomics in direct response to a devastating $116 million hack in late 2025. The emergency proposal to end BAL emissions aims to stabilize the token's value and steer the platform toward sustainable growth, following a catastrophic collapse in its Total Value Locked from a $3 billion peak to just $158 million.

‘We had the exploit, a long crisis response, a lot of difficult decisions, and some very painful conversations about what was and was not sustainable anymore. We also had to let go of people we deeply respect, not because they were not good enough, but because the structure around the protocol had stopped making sense,’ explained Hardt in an X post.

Balancer aims for more sustainable liquidity

Balancer is one of the few protocols to still rely on liquidity mining, with a long-term BAL unlock curve. Based on the current tokenomics, BAL production and unlocks were expected to continue on a gradual curve until 2034.

According to Hardt, the current model was too expensive for Balancer to attract liquidity. The protocol spent more on incentives than the revenue generated. Following the hack, daily Balancer fees fell below $15,000, making it harder for Balancer to survive in the DeFi space. Additionally, the protocol was diluting BAL holders, and the model no longer served the long-term survival of Balancer.

BAL holders to receive compensation

The new proposal aims to discontinue BAL emissions entirely, to be enforced immediately after the vote. Balancer will route 100% of fees to its treasury. Additionally, Balancer will move forward with a leaner operating structure and a smaller team. 

Holders of locked veBAL tokens may lose the most, so Balancer will try to offset the loss with buybacks and a compensation campaign. 

The proposal offers to reduce the V3 swap fee protocol share from 50% to 25%, so liquidity providers can retain a bigger share of fees, instead of receiving newly unlocked BAL. 

The veBAL locking program will also end immediately, with compensation for the holders of $500K. For users who want to abandon their positions, there will be a buyback at 35% of Treasury value, or around $3.6M in total exit liquidity. The burn and compensation may retire up to 35% of the BAL circulating supply. 

Balancer will also dismiss its DAO, which will stop receiving fee allocations. The day-to-day governance decisions will revert to the core team. Remaining veBAL and BAL holders will retain voting power on major decisions. 

BAL traded near an all-time low of $0.15, following the steep decline from last year’s hack. 

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