Gate News, March 24 — The DeFi protocol Balancer has proposed two key governance measures aimed at canceling its token issuance mechanism and reshaping its economic model through buybacks and revenue redistribution. According to the proposal, the protocol will cease the inflationary issuance of approximately 3.78 million BAL annually, while allocating 75% of trading fees to liquidity providers (LPs), up from the current 50%.
Under the new system, the remaining 25% of fees will flow into the DAO treasury for operations and long-term reserves. Marcus Hardt, former CEO of Balancer Labs, stated that this move aims to align protocol earnings with actual product performance, reduce reliance on token incentives, and shift toward a “real revenue-driven” liquidity model.
Additionally, the proposal includes a $3.6 million BAL buyback and burn plan, accounting for about 35% of the DAO treasury. The buyback price will be based on net asset value (NAV), currently around $0.16, higher than the market price. If fully implemented, approximately 22.7 million BAL tokens—about 35% of the circulating supply—are expected to be repurchased.
To balance the interests of long-term holders, Balancer will also introduce a $500,000 compensation plan for veBAL stakers, aiming to mitigate potential revenue changes under the new model. Daniel Koch, head of the Balancer Foundation, said this plan offers holders flexible options to exit or continue participating in the ecosystem.
Operationally, Balancer will consolidate resources into a streamlined team led by the foundation, focusing on core profitable products and reviewing non-core deployments. Previously, the protocol recovered about $26.4 million following the 2025 attack, and compensation processes for affected users are underway.
This governance adjustment indicates that Balancer is shifting from a high-inflation incentive model to a cash flow-centric DeFi structure. As the Ethereum ecosystem faces increasing competition, this strategy could influence liquidity patterns and protocol valuation dynamics.
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