This proposal's description has been partially trimmed to fit.

The full proposal text can be found on the Balancer proposal: https://snapshot.box/#/s:balancer.eth/proposal/0x1da27864d6ae52bbf02b076a6d87ef2bfcaa4963fe4942bd4f33168215681f24

Authors: @danielmk, @0xDanko, @Xeonus, @mendesfabio, @Marcus

PR with Payloads

https://github.com/balancer/multisig-ops/pull/2742

Summary

This proposal restructures Balancer's operational model for long-term sustainability. It consolidates all operations under Balancer OpCo Limited as an agent of the DAO following the wind-down of Balancer Labs, right-sizes the team to 12.5 FTE, and establishes an annual operating budget of $1.9M, a 34% reduction from the ~$2.87M approved under BIP-873.

Combined with the companion [BIP-919] BAL Tokenomics Revamp (which proposes routing 100% of protocol fees to the DAO Treasury at an estimated ~$1.22M/year), this reduces the annual deficit from ~$2.6M to ~$700K and extends runway from under 4 years to ~9 years in the neutral scenario.

This BIP inherits the accountability framework introduced in BIP-873 while resetting every target to match the protocol's post-exploit reality.

Motivation and Context

[BIP-873] Retrospective

[BIP-873] was approved in September 2025 with a budget of $2.87M USDC and 166,250 BAL until Q2 2026, setting DAO expenditure under $250K/month. It unified all service provider budgets under a single roadmap with five strategic pillars and measurable KPIs, built for a growth phase with a larger team and higher ambitions.

Two months after approval, the November 3rd exploit of Balancer V2 Composable Stable Pools, and the rough market conditions that followed, rendered the growth-phase KPIs unachievable. The reputational damage, TVL loss, and operational crisis response consumed Q4 2025 and early Q1 2026.

BIP-873's framework was sound in its unification of SPs and accountability structure, but the reality shifted. This proposal inherits that accountability DNA while resetting every target to match where the protocol is today.

Balancer Labs Wind-Down

Balancer Labs (BLabs) has ceased all operations, publicly announcing the decision to wind down citing risk exposure and the reality that the DAO model under the Foundation wrapper has evolved beyond the need for a BLabs entity overlapping it.

The clean separation between a deprecated BLabs entity and the operational DAO structure is protective: it isolates prior legal exposure from the ongoing protocol operations.

Current State of Operations

Metric	Value
Annual operating budget	~$2.87M (BIP-873 budget, excluding BLabs)
DAO revenue capture	~$290K/year (17.5% of protocol fees)
Net annual deficit	~$2.6M (current model)
BAL emissions (additional dilution)	3.78M BAL/year ($580K at $0.154/BAL)
Entity complexity	Balancer Labs' mandates overlap with OpCo without clear DAO accountability

The current model is not sustainable. Even with cost reductions, the current revenue split with veBAL and BAL emission schedule will deplete the Treasury in under 4 years with no path to self-sufficiency.

These problems predate the November exploit, but that tragic event removed the option of growing out of them. Balancer generated ~$1.32M in total fees over the last three months on a proven V3 architecture. The restructure focuses the team on revenue-generating products with demonstrated traction rather than speculative initiatives.

Entity Consolidation

Balancer DAO operates through the following structure. The Foundation is not an independent actor: it is an agent of the DAO with no shareholders, and its Directors are legally bound to execute governance resolutions.

Entity	Role
Balancer Foundation (KY)	Legal agent of the DAO. Parent company. Holds governance authority delegated by token holders. Directors legally bound to governance resolutions. No shareholders.
Balancer OpCo Ltd (BVI)	Child to Foundation. Primary Service Provider. Direct contractors consolidated (via COR) under this umbrella. Responsible for engineering, operations, BD, data, and communications.
Balancer Onchain (BVI)	Child to OpCo. Protocol operations entity (incorporated via BIP-863). Responsible for fee collection and other onchain operations.
Balancer Labs OÜ (Estonia)	Original founder entity. SC team, integrations and data. All operations ceased; essential staff contracted via OpCo.

Operational Budget Allocation

This covers all contributor compensation, service provider fees, infrastructure, and operational costs. It represents a ~34% reduction from the ~$2.87M approved under BIP-873 (which did not included BLabs expenses that were previously off-DAO budget).

Notes on reductions:

1. Salary cuts and headcount reduction to 12.5 FTE, including dedicated service providers (Beets, MAXYZ). Engagement with MOIC (marketing) terminated.
2. Salary tiers are introduced to ensure transparency and consistency. DAO-funded positions compensated fairly and uniformly at equivalent levels of seniority and responsibility.
3. Cayman/BVI footprint was reduced, removing the DAO community seats, and board meeting on-site. The structure will remain as lean as possible, and the team will explore alternatives to further reduce costs, while maintaining jurisdiction presence.
4. Infrastructure, software, and subscriptions under review for further cost reduction.
5. Q2’26 budget will reflect savings if the proposal passes, with immediate reductions in current payroll that are capable of offsetting the changes in the core team.

Team Composition

~12.5 FTE (including dedicated service providers)

The team is sized to maintain protocol security and performance while growing revenue-generating products within the operating budget. The restructure reduces headcount from approximately 25 to 12.5, retaining core expertise across smart contracts, SDK, frontend, API, product, BD, and operations.

Product Scope

The team concentrates resources on products with demonstrated or high-potential revenue. Everything else is deprioritized or deprecated.

Product	Status	Notes
Boosted Pools	Core, Active	Growth. Flagship product. BPT looping strategies drive liquidity and volume.
reCLAMM	Core, Active development	Growth. Flagship product. Vulnerability fix required before relaunch. Possible rebranding.
LBPs	Opportunistic	UI delivery in progress. Actively marketed only when market conditions favor token launches.

The team maintains V3 smart contracts, the frontend, backend, SDK, and integrations across active deployments. V2 moves to maintenance-only on a sunset path.

Beyond the core product scope, the team retains a mandate to explore new product opportunities as bandwidth allows and core KPIs are met. Current areas of interest include ETF-style structured products, yield-optimizer vaults, agent-based liquidity tooling, and improvements to boosted pool performance. These are not commitments; they are directions the lean team may pursue when the foundation is stable.

Chain Strategy

The protocol is currently deployed across 9+ chains on V2 and V3. Not all deployments generate meaningful revenue relative to their maintenance and operational cost. Active support is confirmed for four chains that produce meaningful volume and revenue: Ethereum, Gnosis, Arbitrum, and Base. All other chain deployments will undergo a thorough review based on fee performance, TVL, operational overhead, and strategic alignment. Chains that do not meet viability thresholds will be evaluated for sunset with reasonable notice to affected LPs and partners.

Growth Approach

Growth is restructured from broad outreach to focused strategic engagement:

• Outreach is reserved for large strategic partnerships and significant liquidity providers.
• Grant programs pursued for incentives and new chains that meet the viability framework.
• Marketing will be handled opportunistically, no dedicated function, reduced spend on content creation.

Self-service integration and ops tooling (such as Defilytica) will be integrated, built and maintained so smaller projects can deploy on Balancer without BD support. AI-assisted onboarding will be explored to reduce manual overhead.

DAO Governance and Oversight

The Balancer Foundation is, and remains, an agent of the DAO. It has no shareholders, and its Directors are legally bound to governance resolutions. The Foundation and its subsidiaries exist as legal wrappers to execute what governance decides. They do not set strategy independently.

With fewer service providers and a smaller team, a practical concern about centralization may be valid. This proposal addresses it through the following mechanisms:

• Mandatory transparency reporting: Quarterly financial performance reports, as committed in BIP-873, are mandatory. Treasury operations remain on-chain and auditable. The first report covers the 90 days following vote passage.
• Core team mandate: Protocol fee parameter changes, new chain deployments, and protocol operational decisions (vendor selection, sprint priorities, chain deprecation, hiring/terminations within approved budget, fee split agreements and direct deal negotiations with partners) fall within the core team's discretion - new factories, novel pool types and new chain will require the DAO multisig.
• KPI checkpoint: The team commits to measurable milestones at 6-month and 12-month checkpoints (see below). A formal 6-month review will be conducted to as...