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.