Balancer Fork Proposal Asks for 6M BAL, May Dilute Redemption Value

Balancer Fork Proposal Could Lower Redemption Value

MAXYZ, comprised of ex-Balancer contributors, has proposed a plan to receive up to 6 million BAL – currently held outside of circulation – to bootstrap a new protocol. This request introduces a potential dilution for current BAL holders awaiting redemption under Balancer’s proposed wind-down plan.

The proposal, detailed on September 20th and expanded on September 23rd, runs alongside the existing plan to allow BAL holders to burn their tokens for a pro-rata share of the DAO’s remaining assets. Importantly, neither proposal directly transfers tokens, alters pool operations, or grants the fork rights to the core Balancer code.

Financial Implications for BAL Holders

The core concern centers on the impact to redemption value. According to unaudited on-chain data from September 18th, approximately $9.96 million in non-BAL assets were available for distribution among 63,068,821 redeemable BAL. At those prices, each eligible BAL was worth roughly $0.1579. An additional 3 million redeemable BAL would lower that figure to $0.1507, while 6 million would reduce it to $0.1442 – an 8.7% decrease.

These figures are illustrative, dependent on the grant’s staging, the ultimate amount circulating, and the final terms of the wind-down ballot regarding tetuBAL holders. The wind-down plan proposes an audit and snapshot in May 2027 to finalize redeemable supply.

Fork’s Potential Return and Timelines

In exchange for the BAL grant, MAXYZ proposes a contingent allocation of 10% of the fork’s fully diluted token supply (or equivalent value) to the Balancer treasury. This is a proposed right, with no guaranteed value today. The group also seeks to extend the operational timeline of Balancer pools, potentially until the second quarter of 2027, to allow for a more orderly transition. Some partners have expressed openness to migrating liquidity to a fork, contingent on security and migration paths.

Source: CryptoSlate