Balancer Labs, the core team behind the decentralized finance (DeFi) protocol Balancer, has announced plans to wind down after a $116 million exploit that occurred in November.

 

The decision, according to CEO Marcus Hardt, was driven by the impact of the hack. Despite continuing to generate revenue, Balancer Labs’ economic model was no longer sustainable in the aftermath of the hack.

 

“We were spending too much to attract liquidity relative to what that liquidity was actually generating in revenue,” Hardt said. “We were diluting BAL holders to sustain a system that, in my view, was no longer serving the protocol well. At some point, you have to be honest about that.”

 

With Balancer Labs winding down its operations, the protocol is expected to be managed by the Balancer Foundation and its decentralized autonomous organization (DAO), an approach supported by co-founders Hardt and Fernando Martinelli. 

 

DAO members have been asked to vote on a proposal to restructure the protocol and its tokenomics. If approved, BAL emissions will end, all fees will be routed to the treasury, and the protocol’s share of swap fees will be reduced. The team size will also be cut.

 

So, while Balancer Labs, the core development team, is winding down, the protocol will continue operating under new management with a leaner structure.

 

 

The Balancer Protocol Exploit

On November 3, 2025, Balancer Protocol suffered a smart contract exploit targeting its V2 composable stable pools, resulting in the theft of significant amounts of cryptocurrency.

 

Although Balancer had a permission system in place, a bug in the smart contract allowed the attacker to bypass these controls. The attacker exploited the vulnerability to gain unauthorized access to the protocol’s shared vault system, enabling them to drain assets from multiple liquidity pools across different blockchains simultaneously.

 

The hack had a severe impact on Balancer, causing its total value locked (TVL) to drop from about $775 million to $258 million within days of the exploit, according to a report. Its native token, BAL, also fell by about 30%.

 

The shutdown of the Balancer Labs team comes weeks after crypto aggregator Step Finance announced its own shutdown following a January 31 hack that reportedly led to losses of between $26 million and $40 million from the protocol’s treasury.

 

Bunni, a decentralized liquidity protocol built on Uniswap V4, also shut down around October last year after suffering a hack that resulted in losses of about $8.4 million.

 

 

Resolv Labs’ stablecoin, USR, has lost its U.S. dollar peg following an exploit of the token’s contract that allowed attackers to mint millions of tokens.

 

The exploit, which occurred on March 22, 2026, resulted in the creation of 50 million unbacked USR tokens, prompting the team to temporarily pause the protocol’s functions to prevent “further malicious actions.”

 

 

According to YieldsandMore, which first reported the story, the attack began with a 100,000 USDC deposit by the attackers, ultimately causing USR to lose its dollar peg and fall to $0.01.

 

After minting the USR tokens, the attackers converted them into wrapped USR (wstUSR) to access deeper liquidity on decentralized exchanges (DEXs). This allowed them to offload large amounts of wstUSR more gradually, reducing the risk of an immediate price crash of USR.

 

The next phase of the attack involved dumping and selling wstUSR tokens across multiple platforms, including KyberSwap and Velora. Using this method, the attackers swapped wstUSR for USDt and USDC, which were then aggressively converted into Ether (ETH).

 

Although the attack was first made public by the crypto research and analysis group YieldsandMore, the Resolv team was only able to pause the protocol three hours later.

 

“It took ResolvLabs three hours to pause its protocol. Roughly one hour of that delay came from the gap between submitting the multisig transaction and collecting the four required signatures to execute it,” YieldsandMore wrote on X.

 

While 50 million tokens were initially minted by the attackers, blockchain security company PeckShield reported that an additional 30 million USR tokens were later minted, bringing the total to approximately 80 million.

 

 

Price Action of USR in the Aftermath of the Exploit

The minting and dumping of USR tokens triggered a severe depeg, sending its price from $1 to roughly $0.02 to $0.05 within minutes, a decline of about 95 to 97%.

 

Although it briefly rebounded to between $0.14 and $0.20, USR is currently trading at $0.2773, according to data from CoinMarketCap at the time of publication. 

 

The USR depeg ranks among the most severe in recent history, second only to the collapse of Terra's TerraUSD (UST) in 2022, which fell from $1 to $0.02 and lost 98% of its value. Iron Finance also had its IRON stablecoin lose its dollar peg, dropping from $1 to about $0.05.