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 assess progress. If DAO revenue falls below $60K/month for 3 consecutive months, the team commits to presenting the community with revised options.

Treasury Council (TC) and Directors Multisig Formation

Introduced by [BIP-882], the Treasury Council (TC) was created to ensure that within the corporate structure of the Balancer Foundation, the ecosystem interests are served and protected.

It also carries a great responsibility for being the signer set of the Treasury multisig (0x0EFcCBb9E2C09Ea29551879bd9Da32362b32fc89) The increased responsibility calls for a more internally aligned team of members to carry the main Treasury, holding all assets and DeFi strategies.

Additionally, the TC will now be responsible for channeling internal disputes and decision-making around the executive orders mandated by governance.

Current TC composition (threshold 5/7)

• @0xDanko (0x122AFb4667C5f80e45721a42C7c81e9140C62FA4)
• @Xeonus (0xaa5af0dd9c52c773d36cdbc509a0b2a1ded4c196)
• @danielmk (0x606681E47afC7869482660eCD61bd45B53523D83)
• @mendesfabio (0x90347b9CC81a4a28aAc74E8B134040d5ce2eaB6D)
• @gosuto (0x11e450c72c2258ec792d5f64a263ecb18e8c0f06)
• @solarcurve (0x512fce9B07Ce64590849115EE6B32fd40eC0f5F3)
• @notsoformal (0xd17a9f089862351af82fa782435fac0f9e17786c)

SwapOwner

• @solarcurve (0x512fce9B07Ce64590849115EE6B32fd40eC0f5F3) <> @Marcus (0xb7364Fca20EEC90f51b158C05199044AD362b675)
• @notsoformal (0xd17a9f089862351af82fa782435fac0f9e17786c) <> @franzns (0xA574Af018138bBC2bf065f68015687Aa67388A2A)
• @danielmk (0x606681E47afC7869482660eCD61bd45B53523D83) <> @danielmk (0x7984aB7e6B51A50d970b74a437BC82156753b866)
• @mendesfabio (0x90347b9CC81a4a28aAc74E8B134040d5ce2eaB6D) <> @mendesfabio ( 0xF162D64Cab37fD3335122024f23680AF7cf067ad)

The same can be said for the legal entities and their multisig, which carry great responsibility in the daily activities and operations (BIP-882), and with the DAO Directors seats being deprecated to reduce the Cayman/BVI corporate footprint, there's a need to replace them to add professional and backup signers, ratifying the swapping of Joshua Zimmer for @Lemma (as active signer); and @Xeonus for @Marcus (as backup). The 3/4 threshold remains unchanged, with Leeward (Director/Supervisor) and @0xDanko (Head of Operations) being the other two composing the 4-signer set.

SwapOwner

• Swap Xeonus (0x7019Be4E4eB74cA5F61224FeAf687d2b43998516) <> Marcus (0xb7364Fca20EEC90f51b158C05199044AD362b675)

Risks and Mitigations

As we move forward to a vote, the community should weigh the following risks, which are here explained with how the proposal aims to mitigate them.

Team Morale and Retention

Risk: Restructuring from a larger team to 12.5 FTE is disruptive. Key contributors may choose to leave, and the transition period creates uncertainty. Mitigation: 45-day notice period for departing members. New BAL vesting for continuing contributors aligns long-term incentives. Clear role definitions and salary tiers remove ambiguity. The team members who continue are those who believe in the mission, were willing to take a salary cut and operate lean.

Operational Bottlenecks

Risk: A lean team covering engineering, operations, BD, data, and communications has minimal redundancy, slower execution on new features and fewer parallel workstreams. Loss of any key contributor creates risk. Mitigation: Cross-training across functions. Documentation of all critical processes.

Revenue Underperformance

Risk: If DAO fee revenue does not reach ~$1M/year under the new fee structure, the burn rate grows and runway shortens. Mitigation: Revenue sensitivity analysis (three scenarios: conservative, base, optimistic) is completed before vote. The 6-month review includes course correction. The Treasury (even post-buyback) provides a buffer in conservative scenarios.

Centralization Aspects

Risk: Fewer SPs and a smaller team may appear as centralization to the community, even if the legal framework remains DAO-governed. Mitigation: Mandatory quarterly transparency reports. Onchain treasury operations. Defined governance roles. 6-month revaluation. The restructured protocol actually requires fewer governance decisions (no gauge voting, no emission parameters), reducing the scope of centralized authority and power/influence.

Broader Community Perception

Risk: A headcount reduction may be perceived as a sign the protocol is failing, triggering LP exits and partner disengagement. Mitigation: The restructure is framed as a transition to sustainability which should be interpreted in conjunction with the companion tokenomics revamp proposal, demonstrating the full plan to self-sufficiency.

KPI Approach (Expected Impact)

This operational proposal is the execution counterpart to the tokenomics restructure. The tokenomics BIP eliminates BAL emissions, restructures protocol fees (100% to DAO Treasury, V3 protocol share reduced to 25%), sunsets veBAL, and offers a BAL buyback. Those changes only make financial sense in the context of a lean operating model that can sustain itself during tough market conditions on ~$1.22M/year in fee revenue (premises and assumptions to different scenarios can be found here: source).

The team commits to implementing both proposals together. This linkage ensures the community is voting on specific KPIs and expected outcomes:

Global Indicators

• Revenue targets, measured by annualized (prev. 3-month) DAO revenue
• Cost discipline (actual vs. budgeted operating expenses)
• Security posture (audit completion, incident response metrics)

DAO Treasury

• Budget drops from ~$2.87M/year to $1.9M/year. Combined with 100% fee capture (BIP-Tokenomics), the Treasury runs a ~$700K/year net deficit instead of the current ~$2.6M/year gap. Runway extends from under 4 years to ~9 years post-buyback and the veBAL compensation campaign. Expected outcome: The protocol becomes financially sustainable for the first time. The trade-off in velocity is necessary to avoid treasury depletion.

Contributors

• Clear and lean structure, single entity, defined budget. No more ambiguity about which entity pays whom or who has authority. Expected outcome: Painful but necessary. The current team size cannot be sustained on protocol revenue. Departing contributors will be treated fairly with reasonable notice.

Protocol Development

• Focused team with clear priorities. Less coordination overhead across entities. Expected outcome: Fewer things, done better. The viability framework ensures resources go where they generate measurable and meaningful returns.

Community & Partners

• Transparent reporting, clear accountability, sustainable operations. Expected outcome: Partners on viable chains get a more focused, responsive team. The quarterly reports provide visibility to BD results that are not communicated today.

General Specification

After community feedback and discussions, pre-snapshot:

• Build payloads for swapping Safe owners;
• Allocate stablecoins for working capital under Treasury and transfer to OpCo;
• Notice and Termination Agreements of current contractors.
• Onboard core team (former BLabs) to OpCo

Technical Specifications

1. Treasury Council (TC) Signer Swaps

Swap 4 signers on the TC multisig (0x0EFcCBb9E2C09Ea29551879bd9Da32362b32fc89, threshold 5/7) across 4 chains: Ethereum, Arbitrum, Polygon, Gnosis.

Out	In	Old Address	New Address
solarcurve	Marcus	0x512fce9B07Ce64590849115EE6B32fd40eC0f5F3	0xb7364Fca20EEC90f51b158C05199044AD362b675
notsoformal	franzns	0xd17a9f089862351af82fA782435faC0f9e17786c	0xA574Af018138bBC2bf065f68015687Aa67388A2A
Mendesfabio (old	Mendesfabio (new)	0x90347b9CC81a4a28aAc74E8B134040d5ce2eaB6D	0xF162D64Cab37fD3335122024f23680AF7cf067ad
Danielmk (old)	Danielmk (new)	0x606681E47afC7869482660eCD61bd45B53523D83	0x7984aB7e6B51A50d970b74a437BC82156753b866

2. Balancer Onchain Ltd Signer Swap

Swap 1 signer on the Onchain Ltd multisig (0x16b0056636Fcc85f92C49cD49a24bc519d4A1941) across 15 chains: Ethereum, Arbitrum, Optimism, Base, Polygon, Gnosis, Avalanche, zkEVM, Mode, Fraxtal, HyperEVM, Plasma, Sonic, X Layer, Monad.

Out	In	Old Address	New Address
Xeonus	Marcus	0x7019Be4E4eB74cA5F61224FeAf687d2b43998516	0xb7364Fca20EEC90f51b158C05199044AD362b675

3. Foundation / OpCo Directors Signer Swap

Swap 1 signer on the Directors multisig (0x3B8910F378034FD6E103Df958863e5c684072693) on Ethereum only. Threshold remains 3/4.

Out	In	Old Address	New Address
Xeonus	Marcus	0x7019Be4E4eB74cA5F61224FeAf687d2b43998516	0xb7364Fca20EEC90f51b158C05199044AD362b675

4. L2 Authorizer Admin Transfer to Omni Multisig

Transfer the DEFAULT_ADMIN_ROLE on the Balancer Authorizer contract from per-chain DAO multisigs to the unified Omni multisig. Each chain executes two transactions: (1) grantRole to Omni, then (2) revokeRole from the current DAO multisig.

Chain	Authorizer	Current Admin (DAO Multisig)	New Admin (Omni)
Arbitrum	0xA331D84eC860Bf466b4CdCcFb4aC09a1B43F3aE6	0xaF23DC5983230E9eEAf93280e312e57539D098D0	0x9ff471F9f98F42E5151C7855fD1b5aa906b1AF7e
Base	0x809B79b53F18E9bc08A961ED4678B901aC93213a	0xC40DCFB13651e64C8551007aa57F9260827B6462	0x9ff471F9f98F42E5151C7855fD1b5aa906b1AF7e
Gnosis	0xA331D84eC860Bf466b4CdCcFb4aC09a1B43F3aE6	0x2a5AEcE0bb9EfFD7608213AE1745873385515c18	0x9ff471F9f98F42E5151C7855fD1b5aa906b1AF7e
Optimism	0xA331D84eC860Bf466b4CdCcFb4aC09a1B43F3aE6	0x043f9687842771b3dF8852c1E9801DCAeED3f6bc	0x9ff471F9f98F42E5151C7855fD1b5aa906b1AF7e
Avalanche	0xA331D84eC860Bf466b4CdCcFb4aC09a1B43F3aE6	0x17b11FF13e2d7bAb2648182dFD1f1cfa0E4C7cf3	0x9ff471F9f98F42E5151C7855fD1b5aa906b1AF7e

What the Authorizer DEFAULT_ADMIN_ROLE controls

The Authorizer is the Balancer access control contract. The DEFAULT_ADMIN_ROLE (0x00...00) is the root role that can grant and revoke all other roles. This enables all roles existing in the authorizer, including but not limited to the following operational capabilities:

Capability	Description
Grant/revoke any role	Control who can call permissioned functions across the Vault, pool factories, gauges, and fee controllers
Swap fee management	Authorize addresses to set protocol-level and pool-level swap fees
Protocol fee collection	Authorize fee withdrawals and protocol fee parameter changes
Pause/unpause	Grant emergency pause authority on the Vault, usually to the Emergency subDAO multi-sig safes
Relayer management	Authorize/deauthorize relayers for the Vault
Factory permissions	Control which factories can register pools with the Vault

Why consolidate L2 admin under Omni

Currently each L2 has its own DAO multisig holding admin privileges. This creates operational overhead as 5 separate multisigs need to coordinate for any cross-chain change. Transferring to the Omni multisig (0x9ff471F9f98F42E5151C7855fD1b5aa906b1AF7e), which already exists on all these chains, consolidates L2 admin authority under a single signer set. This reduces coordination cost while the core team operates lean at 12.5 FTE. It follows the same principles of operation introduced for HyperEVM, XLayer and Monad chain (see BIP-862 for rationale).

Why Ethereum mainnet is excluded

Ethereum mainnet is not included in this admin transfer. The mainnet DAO multisig retains the DEFAULT_ADMIN_ROLE on the Ethereum Authorizer because it holds additional permissions that govern BAL token minting. Any changes to BAL supply or minting parameters must go through the DAO multisig and the formal governance process (BIP + vote). Separating BAL-related authority from core team operational control is an intentional safeguard.

However, for day-to-day operational permissions on mainnet such as factory registration, fee parameter changes, relayer management, and similar actions (i.e. the same scope that the Omni multisig handles on L2s), the DAO multisig can execute these directly without a formal BIP, as they fall within the core team's operational mandate defined in this proposal identical to L2s.