[BIP-929] Fork and Reincarnate

Governance General Proposal
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TL;DR

A wind-down of Balancer has been proposed. Whether it passes or not, we would like to make sure that the spirit of Balancer survives either way. We propose a reincarnation of the protocol that is ready for the next wave of assets coming onchain. Balancer has developed and fine-tuned unique technology that is perfectly positioned for this, and should find a continuation no matter what.

In order to do so, MAXYZ will lead a new official fork, to which liquidity, team members, partners, users and intellectual property can be migrated. To facilitate this migration, pools and vaults do not pause until the end of 2027-Q2.

Pre-seed this endeavor with the remaining non-circulating $BAL. In return, if the new protocol has a token generation event, 10% of its FDV supply is pre-allocated to the Balancer treasury. The fork’s treasury will be blacklisted from any Balancer treasury redemption.

Vision: “Tokenized Stock Exchange”

Multiasset pools remain a unique aspect of the Balancer tech. Numerous partners indicate they cannot replicate their pool strategies on other AMMs. This, in combination with the arrival of tokenized stocks onchain, is too obvious of an opportunity. Onchain index funds as envisioned years ago in the Balancer whitepaper are finally within reach. Besides equities we are also seeing other traditional financial instruments make it onchain; structured credit products are being built by Royco (on the ECLP pool type!) and Avant is already using Balancer as a part of their multi-strategy product suite. The big traditional institutions are also cooking (e.g. S&P buys OpenZeppelin, SEC issues tokenized stocks exemptions, NYSE builds venue for tokenized stocks, Robinhood launches its own (stocks) blockchain), but Balancer has been doing this for years already, researching and building the technology this next wave will run on:

  • Tactical rebalancing pools (i.e. variable weights)
  • Dynamic fees
  • LVR capture
  • Agentic-native access via MCP/plugins
  • Agentic contests for pool parameter optimization
  • Hooks for permissioned pools, managing toxic flow, etc.
  • Better PMF for pool and asset types
  • Dynamic ECLPs
  • Dynamic AutoRange parameters

The size of this new opportunity should not be underestimated. Here is a strictly illustrative example starting from the total addressable market:
Top 10 stock exchange trading volume (daily) $750b
10% of that volume finds it way onchain $75b
Assume 1 basis point fee $7.5m
Assume a market share of 1% of the onchain market $75k
Revenue (annualized) $27.375m

Historically, Balancer has always had a market share of about 3-4%, we are not including other types of (non-stocks) liquidity, ignoring other revenue streams, etc. Nonetheless we arrive at 75x of Balancer’s revenue today!

Official Fork

  • Grant the fork entity the remaining non-circulating $BAL as a pre-seed for the reincarnation. Currently this amounts to: ~3.5m (treasury) + ~1.6m (Balancer Labs fundraise safe) + ~928k (BLabs team safe) ~= 6m $BAL, roughly $690k at today’s price.
    • In return, If the fork entity has a TGE or other liquidity/exit event (whenever it occurs, and regardless of any future Balancer wind-down or dissolution), 10% of its FDV token supply (or equivalent value) will be pre-allocated to the Balancer treasury
    • MAXYZ will front the costs of setting up a suitable legal entity, and after verification of this fact the Balancer treasury council will send the grant to a new designated Ethereum address being the fork’s treasury. The fork’s treasury will be excluded from any form of redemption against the Balancer treasury
    • Two of the seven treasury council seats are MAXYZ. To address this conflict of interest these seats are given up before the grant is sent, changing the threshold from 5-of-7 to 4-of-5
  • Delay the pausing of any vault or pool until 2027-Q2 (unless in an emergency situation). We’ve discussed migration of current liquidity with a number of partners. There is indication that they would like to move over (a portion of) their liquidity, but both sides need ample time to do so
  • Ideally we would keep the interface and even bytecode of the smart contracts the same. However, a fresh deployment also gives the chance to reevaluate some (redundant) parts of the system and reduce complexity where possible
  • The new fork entity will acquire a perpetual, irrevocable, nonexclusive license to use all IP owned or controlled by Balancer entities. If Balancer entities dissolve, that license upgrades to a full exclusive assignment of whatever IP interest the dissolving entity held
  • Multiple current and old team members have indicated interest in a fork. The fork entity should be able to engage or hire any current or former Balancer contributor. Where possible, any non-compete, non-solicit, or exclusivity restriction that would otherwise prevent this is waived

Founding Team

  • @Gosuto has a background as a financial controller, holds a BA in Artificial Intelligence and a MSc in Data Science. Onchain since Ethereum’s block 0. Contributor to Balancer for 4 years
  • @Zekraken has a background in traditional finance for 15 years with various roles, most recently a portfolio manager at JPMorgan for 6 years. Contributor to Balancer for 6 years

Amendments

Note that we tried to incorporate as much feedback from stakeholders as possible and are still talking to additional parties. It is possible we will still make some amendments before the Snapshot vote. Any additional comments are most welcome.

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Hi all,

I’m Val - a longtime member of Rocket Pool’s Incentive Management Committee (IMC). I’m posting here as myself within that context (as opposed to posting a group-drafted opinion we wrote as a committee).

I strongly support the idea of delaying when pausing occurs. It’s unclear where the urgency is coming from. As a member of volunteer multisig figuring things out, a ~month timeline isn’t pleasant. Ofc we need to roll with the punches that happen, but this is an oddity in terms of having some urgency behind it and being opt-in (as opposed to a security event, for example). Q2 would be great; even an extra month would be quite significant.

In terms of wanting to continue on a fork, I think it’s quite realistic that we’d want some of our liquidity there. This is made challenging by needing to rebuild trust in security and name recognition. To those ends, keeping bytecode the same, providing easy migration paths for LPs, advertising the official fork on Balancer before it goes into pause mode would all help tremendously.

I’m sad to see Balancer go. This protocol has been an important partner for us for a very long time, and the oraclized metastable pools really fit our use case extremely well. I wish all the best for all staff and dao members.

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Royco strongly supports the MAXYZ proposal.

Royco has facilitated more than $3.1 billion in volume and is backed by Electric Capital, NFX, Coinbase Ventures, DCF Capital, and more. We’re building toward the largest onchain tranching protocol, and Balancer is a critical part of that path. Royco Day uses Balancer v3 E-CLPs as our secondary-liquidity venue. When Royco succeeds, that translates directly into significant TVL, trading volume, and revenue for $BAL holders.

The current wind-down timeline makes no sense for Balancer. Existing partners need sufficient time to make responsible wind down decisions. Any pause should be pushed into next year at the earliest. Additionally, the best outcome for a handoff would be for MAXYZ to preserve or take over as much of the current deployments as is possible. Balancer still has roughly $63.5 million of TVL today, and building off these deployments as a foundation is a much stronger start than rebuilding from zero.

The economics are extremely favorable for $BAL holders: roughly $690,000 of $BAL, implying a ~$6.9 million valuation, is a modest bet to preserve Balancer’s technology and team knowledge.

Royco is in active support of MAXYZ and will be engaging with $BAL holders on what this means for existing partners and the future of Balancer.

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Two quick questions:

  1. If Balancer stays operational for another ~8 months, who pays the maintenance costs after Oct 31, and doesn’t that directly conflict with preserving Treasury value for BAL holders?
  2. If the fork receives ~6M BAL and sells it on the market, wouldn’t those BAL potentially become redeemable against the Balancer treasury and dilute existing BAL holders by roughly 8.7%? How will this be prevented?
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FAQ

Why a grant in $BAL?

We like to think of the DAO’s non-circulating $BAL as its untapped potential. It is the last bit of $BAL that it was never able to materialise into contributions, liquidity, partnerships, etc. We therefore thought it to be fitting to propose to grant exactly this $BAL to act as the pre-seed for the fork. Balancer considers winding down, and in the process uses its unconsumed reserves to start anew.

How would it affect NAV?

The effects this grant would have on the treasury’s NAV could only be positive; it is a liability on its balance sheet less and 10% of the fork’s value is pre-allocated to the Balancer treasury. However, some of the grant would find its way into circulation, somewhat reducing the NAV per share. @rebelhermits’s rough percentage looks correct (1-(74.602m/(74.602m-6m))), meaning the old NAV of $0.1487 would go to $0.1368, just a bit more than a cent. Ultimately, the question to consider is, is up to 8.7% of the supply today worth more or less than 10% of the fork?

Relation to Wind-down

After talking to the directors in charge of the potential wind-down, we have learned that the rough costs for keeping pools unpaused are around $5k per month (API, hosting, maintenance). This is likely covered by any revenue that keeps flowing in due to the pools still being in production. In any case, the $220k buffer in the wind-down budget will be able to cover any of these additional expenses.

Tetu

Our understanding is that Marcus’ proposal already earmarked some non-circulating $BAL supply to the tetuBAL locker. When writing our proposal, we did not realize that there might not be enough non-circulating supply to cover both tetuBAL and our grant. Therefore, we propose to receive only half of the grant upfront, and the remainder (meaning up to 6m $BAL in total) after tetuBAL holders have been paid out.

Intellectual Property

For our purposes, the IP licenses we mention relate to the codebase, not necessarily Balancer’s trademark(s). Just to be clear; the fork would have nothing with the $BAL token, carry a new name and new logo, all falling under a new entity.

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GM GM old frens, colleagues, and comrades,

I spent a few years with the Maxis, and they were great years.

@Gosuto understands DeFi intrinsically. He lives a life dedicated to DeFi and Web3, and brings a strong finance and protocol-operations background. @Zekraken understands how money works and can nerd out on DEX mechanics and bonding curves with the best of them.

We built Balancer V3 together, drawing on lessons learned from V2:

  • The DEX architecture is solid and mature
  • The DevEx and integrations were carefully planned
  • The API is feature-complete and has everything you need
  • The UI is beautiful

I understand that the original investors and founders are done, and that Balancer as it was is ready to wind down. It’s sad to see, but it’s time.

At the same time, it’s great to see the talent and code that BalancerDAO fostered over the years find a path to something new, without the weight Balancer has been carrying.

Onchain stocks are a genuinely new market. The DeFi alchemy of the COVID era seems to be starting again, with a lot of interest and serious flows. Go get it. Winning will depend on finding the right partners, and the early support from Royco and Rocket Pool in this thread is a good sign.

In short:

  1. You should 100% do this.
  2. For BalancerDAO to seed the next incarnation while it winds down, it would help to see more of a business and BD plan. The 10% FDV allocation and the redemption blacklist are good starts. I’d also like to see how the ~6m BAL will be used: whether and how it will be sold (echoing @rebelhermits’ question), what runway it buys, and which partners and liquidity you realistically expect to migrate. Beyond migration, I’d like to hear about the new deals and relationships that could bring fresh volume. For example, Pons on Robinhood Chain already pairs launches against tokenized stocks and currently graduates them to Uniswap. Could those graduations land in Balancer-style multiasset pools instead? A few partnerships like that would make the revenue case much more concrete. That would make it much easier to judge whether this is where your seed capital should come from.
  3. I agree with @valdorff that giving partners more time is prudent. A roughly one-month wind-down is tight for anyone making liquidity decisions, especially volunteer multisigs. Pushing any pause out, whether to 2027-Q2 as proposed or even by a few months, would make an orderly migration far more realistic. It would also give the Maxis time to put together the business plan asked for above and run this governance process properly, rather than rushing a decision on seed capital.

Godspeed.

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After some discussions and clarification, I support the fork and reincarnation. It will be cool to see if this tech still has legs. The grant is relatively small to what can still be achieved, and preserving this legacy is worth the shot. Danko will be around for the Balancer wind-down, and the community can still count on me for whatever comes next. Good luck with the vote, @maxyz.xyz.

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Fully support this. Too much good work has gone into Balancer to let it end here.

I know @gosuto and @zekraken and have a lot of trust in them. They know the protocol inside out, and I’m excited to see what they can achieve with a fresh start.

With stock tokenization picking up, Balancer’s tech feels really well positioned. The flexibility of weighted pools makes this a particularly interesting direction to explore, and I’d love to see this team get the chance to build on that.

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I have been part of this ecosystem for many years, incl. being a Balancer Maxi, a founding member of the @maxyz.xyz and a former member of the board of directors of the Balancer foundation.
Therefore, I have a more opinionated view which people should be aware of. At first, some details were not too clear to me from the initial prop. which are addressed now in the FAQ which is great to see!

My personal take why I am in favor of this proposal that can likely pass in parallel / independent to Marcus, prop.:

  • continuation of Balancer’s legacy with members that were driving the protocol for years
  • a real option for partners to continue to use the tech as signaled in posts above. A fresh start will be an active choice which is great IMO
  • chance for tech to refocus on a niche that has a high likelihood of being successful, getting rid of everything that dragged us down such as our not ideal tokenomics in particular

There are of course risks to be aware of such as how to handle potential v3 bugs, proper wind-down and smooth partner migration. But from the years working together with @zekraken and @gosuto I am confident they can deliver.

Disclaimer: I am not an active contributor, board member nor shareholder anymore and only act as an ops signer with @maxyz.xyz since July 2026.

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