Balancer wasn’t broken as a product — it was still generating over $1 million in revenue in recent months. Yet Balancer Labs is shutting down because the costs of maintaining liquidity and operations outweighed what the protocol was earning.

This situation reveals a core issue in DeFi: strong technology doesn’t guarantee sustainability if tokenomics are flawed. Excessive incentives, high spending, and dilution can quietly undermine even a functioning platform, turning growth into long-term instability.