Author: Stake DAO Association Category: A — Stake DAO Governance Proposal (SDGP)
Nature of this document
This document is a non-binding governance coordination notice published by the Stake DAO Association (a Swiss not-for-profit association) for the benefit of participants in the Stake DAO governance process. It does not create contractual rights or obligations between any person and the Stake DAO Association, between any participants, or with any third party. Where this document refers to actions to be taken by smart contracts, those actions are performed autonomously by code deployed on a public blockchain and are not undertaken by any legal person on behalf of any other legal person.
Summary
Balancer governance ratified BIP-919 — BAL Tokenomics Revamp, which discontinues all gauge voting and emissions on Balancer and ends the economic role of veBAL. This proposal records the operational consequences for Stake DAO’s Balancer-related products and authorises (i) the wind-down of the sdBAL liquid-locker, (ii) the cessation of new veBAL voting-incentive campaigns on Votemarket, (iii) the cessation of the vlAURA delegation arrangement, and (iv) the deployment of an on-chain burn-and-claim contract that will permit holders of sdBAL to exchange their tokens 1:1 for the underlying 80BAL-20WETH Balancer Pool Tokens upon, and following, the scheduled on-chain expiry of the veBAL lock on April 1, 2027.
Regulatory & Legal Notice
This document is a governance coordination notice relating to the operation of a decentralised protocol. It is provided for informational purposes only and does not constitute, and is not intended to constitute, an offer, invitation to treat, solicitation, recommendation, promotion, advertisement, investment advice, financial promotion within the meaning of FSMA 2000 (s.21) or banking, payment, investment, or other regulated financial service in any jurisdiction. No part of this document is intended for, or should be relied upon by, any person located in a jurisdiction where the offering, promotion, or distribution of crypto-assets, voting incentives, or related services would be unlawful.
The Stake DAO protocol operates through non-custodial smart contracts. The Stake DAO Association does not custody or take title to user funds at any point. No fiduciary, advisory, agency, trust, or other special relationship is created between the Stake DAO Association and any person by virtue of the publication of this document or by participation in the Stake DAO governance process.
The terms, eligibility, amounts, and timing of the USDC pro-rata distribution are determined by, and governed by BIP-919 and BIP-920 and remain subject to on-chain execution on the Balancer protocol. The on-chain unlock of the underlying veBAL position is currently scheduled for April 1, 2027 and is determined exclusively by the smart-contract logic of the veBAL contract and the underlying state of the Ethereum blockchain. Stake DAO has no control over BIP-919 and BIP-920 or its execution and makes no representation, warranty or guarantee as to its timing, completion, eligibility criteria, or final amounts.
Applicable frameworks that may be relevant in particular jurisdictions include the Markets in Crypto-Assets Regulation (Regulation (EU) 2023/1114, “MiCA”) the Swiss Federal Act on Financial Services (FinSA), the Swiss Federal Act on Financial Institutions (FinIA), the Swiss Federal Act on Combating Money Laundering and Terrorist Financing (AMLA), Swiss/FINMA guidance, U.S. federal and state securities laws, and any other applicable local laws and sanctions regimes (including without limitation OFAC, EU restrictive measures, and SECO sanctions). Nothing herein is legal, regulatory, accounting, financial, or tax advice. Participation is voluntary and at each participant’s own risk. Each participant is solely responsible for determining the legal, regulatory, accounting, and tax consequences of any action taken in connection with this document in their jurisdiction of residence and any other relevant jurisdiction, and is encouraged to consult independent professional advisers before acting.
Restricted persons. Nothing in this document is directed at, or intended to be acted upon by, any person who is (a) a U.S. Person as defined in Regulation S under the U.S. Securities Act of 1933, (b) ordinarily resident in any jurisdiction in which participation would be unlawful, or (c) the subject of sanctions administered by the United Nations, the European Union, the Swiss State Secretariat for Economic Affairs (SECO), the United Kingdom, or the U.S. Office of Foreign Assets Control (OFAC).
Motivation
BIP-919 ends gauge voting, emissions, and the economic role of veBAL on Balancer. As a direct upstream consequence:
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the veBAL position underlying sdBAL is not expected to accrue further protocol-emission yield following BIP-919 implementation; trailing claims and incidental rewards may continue to accrue until the lock expires;
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Votemarket bribe activity on veBAL gauges naturally terminates;
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BIP-919 and BIP-920 include a one-time $500,000 USDC pro-rata distribution to veBAL holders, sized using retroactive snapshots taken at the time the proposal was submitted. The sdBAL locker is one of the eligible addresses.
Stake DAO’s Balancer-related products (sdBAL liquid locker, veBAL voting incentives on Votemarket, vlAURA delegation) are structurally tied to gauge voting and emissions. With BIP-919 in force, the economic substrate underpinning these products no longer exists, and an orderly wind-down is the appropriate course of action in light of these upstream changes.
The underlying veBAL position remains locked on-chain until April 1, 2027 and the Association has no operational, contractual, or technical means by which it could accelerate that expiry, and any such acceleration would in any event be inconsistent with the immutable parameters of the underlying veBAL contract. This proposal records the path between today and that unlock.
Specification
1. For sdBAL holders
1.1 On-chain exchange of sdBAL for the Underlying 80BAL-20WETH BPT. Following the on-chain expiry of the underlying veBAL lock (currently scheduled for April 1, 2027 and outside the control of the Stake DAO Association or any other person), an on-chain burn-and-claim contract will become operational. The contract will permit any holder of sdBAL to burn their sdBAL tokens in exchange for an amount of 80BAL-20WETH Balancer Pool Tokens calculated on a 1:1 ratio to the locker’s underlying balance, less any unavoidable on-chain execution costs. The mechanism may, alternatively or additionally, be implemented through a Merkle distribution. The exchange mechanism will remain operational for twelve (12) months from its activation date (the “Exchange Window”). Following the close of the Exchange Window, any 80BAL-20WETH Balancer Pool Tokens not claimed will be transferred to the Stake DAO treasury, provided that the Stake DAO Association will use reasonable efforts to publish at least three (3) reminder notices through its official communication channels (governance forum, X/Twitter account, and protocol front-end) at no later than 90 days, 30 days, and 7 days prior to the close of the Exchange Window. Holders are solely responsible for actively claiming within the Exchange Window.
1.2 Pro-rata USDC distribution from BIP-919 and BIP-920. If and to the extent that the Balancer protocol distributes USDC to the address(es) holding the underlying veBAL position pursuant to BIP-919 and BIP-920, those USDC will be made available to addresses holding sdBAL at the eligibility snapshot (defined below) through an on-chain Merkle-claim contract. The amount available to each eligible address will equal its pro-rata share of the USDC actually received by the locker contract, less (a) the standard sdBAL liquid-locker fee of fifteen percent (15%), as previously ratified under SDGP-38, and (b) any unavoidable on-chain execution costs (including gas, claim-execution fees, and any third-party fees). The Merkle-claim window will open following the on-chain receipt of the USDC by the locker contract for a duration of six months (the “USDC Claim Window”). Following the close of the USDC Claim Window, any USDC not claimed will be transferred to the Stake DAO treasury, subject to the reasonable-notice provisions set out in §1.1.
No representation regarding BIP-919 and BIP-920. Stake DAO Association makes no representation, warranty or guarantee as to whether the Balancer protocol will execute BIP-919 and* BIP-920*, the timing of any such execution, the amount actually received, the addresses to which any amount is distributed, or the eligibility of any specific holder of sdBAL.*
1.2(b) Sanctions and screening. The Merkle-claim contract is not authorised to make any USDC available to any address (i) included on the U.S. Treasury Department’s Specially Designated Nationals and Blocked Persons List (SDN List), (ii) subject to EU restrictive measures or SECO sanctions, or (iii) reasonably believed to be controlled by any sanctioned person. Any USDC that would otherwise be made available to such an address will be retained by the Stake DAO treasury pending appropriate guidance from competent authorities.
1.3 Wind-down operations. Upon adoption of this proposal:
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new sdBAL minting is disabled;
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the Stake DAO veBAL boosted vaults are set to “withdraw only” mode (existing depositors can withdraw at any time);
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existing sdBAL liquidity pools and gauges may remain operational, but Stake DAO will allocate no further treasury incentives to sdBAL-related gauges;
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residual revenue accrued to the locker (e.g. trailing claims) is distributed to sdBAL holders through the existing flow until unlock;
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extra rewards accrued by the Stake DAO veBAL boosted vaults will be claimable until October 30, 2026, subject to the reasonable-notice provisions set out in §1.1. Following October 30, 2026, any unclaimed extra rewards will be transferred to the Stake DAO treasury.
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the Stake DAO Association will publish a final accounting of locker fees, residual revenue and treasury sweeps in its monthly report no later than 90 days following the close of the Exchange Window.
2. For veBAL voters using Votemarket
Final veBAL voting incentives are claimable on Votemarket. The standard 6-month claim window applies per Votemarket smart-contract mechanism for each campaign, ending October 30, 2026. No further veBAL voting incentives will be distributed, in line with BIP-919. Unclaimed incentives follow default Votemarket contract behaviour. Claim: https://votemarket.stakedao.org
For the avoidance of doubt, the Stake DAO Association is not the issuer, custodian, or distributor of veBAL voting incentives, which are deposited and claimed by third parties through the Votemarket smart-contract architecture.
3. For vlAURA delegators
The Stake DAO vlAURA delegation ended on April 23, 2026. Final delegation rewards are claimable on Votemarket and the claim window closes October 30, 2026 (aligned with veBAL). Claim: https://votemarket.stakedao.org
The vlAURA delegation was discontinued at an operational level on April 23, 2026, following the end of vlAURA gauge voting (last vote ended on April 14, 2026). This proposal records and ratifies that discontinuation.
Timeline
| Milestone | Date |
|---|---|
| Adoption — sdBAL minting disabled, veBAL boosted vault set to “withdraw only” | T0 |
| veBAL voting incentives claim window | April 30 → October 30, 2026 |
| vlAURA delegation rewards claim deadline | October 30, 2026 |
| Stake DAO veBAL boosted vaults extra rewards claim deadline | October 30, 2026 |
| BIP-919 and BIP-920 USDC on-chain forwarding via Merkle-claim contract claim deadline | 6 months after distribution by Balancer |
| sdBAL → 80BAL-20WETH LP burn-and-claim exchange window | April 1, 2027 → April 1, 2028 |
Risk Acknowledgement
Holders, voters, delegators, and any other persons potentially affected by this proposal expressly acknowledge and accept the following risks:
(a) On-chain timing. The April 1, 2027 unlock date is determined exclusively by the veBAL smart contract and the state of the Ethereum blockchain, and is outside the operational, technical, or contractual control of the Stake DAO Association.
(b) Upstream risk. The BIP-919 and BIP-920 USDC distribution amount, eligibility criteria, snapshot timing, and execution timing are determined exclusively by the Balancer protocol and its governance. Any change to BIP-919 and BIP-920, including its full or partial non-execution, will affect the amounts and timing under §1.2 and is outside the control of the Stake DAO Association.
(c) Market risk. The secondary market price of sdBAL may at any time diverge, materially and adversely, from the value of the underlying 80BAL-20WETH BPT, and from any expected USDC distribution.
(d) Smart-contract risk. All operations described in this proposal depend on smart-contract code that, while audited, is not warranted to be free from defects, exploits, or unforeseen behaviour.
(e) Liquidity risk. Liquidity for sdBAL on secondary markets may decline materially during the wind-down. Holders may be unable to exit at any particular price or at all.
(f) Regulatory risk. The regulatory treatment of liquid-locker tokens, voting incentives, and DAO governance distributions is evolving and may change during the wind-down period in ways that affect any holder’s ability to participate.
(g) Tax risk. Tax treatment of any of the actions contemplated by this proposal (including without limitation the burn-and-claim of sdBAL for the underlying BPT, the receipt of any USDC distribution, and the transfer of unclaimed amounts to the treasury) varies by jurisdiction and may produce taxable events. Holders are solely responsible for determining and discharging their own tax obligations.
(h) Forfeiture risk. Failure to claim within the windows specified in §§1.1, 1.2, and 1.3 will result in the forfeiture of the underlying assets to the Stake DAO treasury.
Provisions
To the fullest extent permitted by applicable law:
(a) Neither the Stake DAO Association, nor its board members, contributors, employees, advisers, delegates, multisig signers, or any other person acting on behalf of or in connection with the Stake DAO Association (each a “Released Party”) shall be liable to any person for any loss, damage, cost or expense (whether direct, indirect, special, incidental, consequential, exemplary or otherwise, and whether arising in contract, tort (including negligence), breach of statutory duty, or otherwise) arising out of or in connection with: (i) any governance decision, including the adoption, non-adoption, modification, or non-execution of this proposal; (ii) any action or inaction taken or not taken in reliance on this proposal; (iii) the operation, malfunction, or non-operation of any smart contract referenced in this proposal; (iv) the timing, terms, execution, or non-execution of BIP-919 and BIP-920 by the Balancer protocol; (v) any change in the market value of sdBAL, 80BAL-20WETH BPT, USDC, or any other asset referenced in this proposal; or (vi) any tax, regulatory, or legal consequence of any of the foregoing.
(b) Carve-outs. Nothing in this section shall exclude or limit liability for fraud, wilful misconduct, or any other liability that cannot lawfully be excluded under the applicable law of the relevant jurisdiction (including, without limitation, mandatory provisions of Swiss law applicable to the Stake DAO Association).
(c) Best-efforts standard. All actions undertaken by Released Parties in connection with this proposal are undertaken on a reasonable-efforts basis, subject to (i) technical and operational feasibility, (ii) the autonomous functioning of underlying smart-contract code, and (iii) the force majeure provisions set out below.
(d) Aggregate cap. Without prejudice to (a) and (b), to the extent any liability nonetheless arises, the aggregate liability of the Released Parties to any individual claimant shall not exceed the lesser of (i) the amount of any fees received by the Stake DAO Association from that claimant in the twelve (12) months preceding the relevant claim, and (ii) one hundred U.S. dollars (USD 100).
No Released Party shall be liable for any failure or delay in the performance of any obligation referenced in this proposal to the extent such failure or delay results from any cause beyond its reasonable control, including without limitation: failure, malfunction, congestion, hard fork, reorganisation, or unavailability of the Ethereum network or any other relevant blockchain; smart-contract exploits; oracle failures; cybersecurity incidents; acts or omissions of third-party governance bodies (including without limitation the Balancer protocol); regulatory orders, sanctions, or court orders; pandemics; war; civil unrest; or acts of God.
This proposal, and any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with the laws of Switzerland, without regard to its conflict-of-laws rules. The competent courts of the Canton of Zug shall have exclusive jurisdiction over any dispute arising out of or in connection with this proposal, subject to any applicable mandatory consumer-protection forum rules.
Any dispute, controversy, or claim arising out of or in connection with this proposal shall be finally resolved by arbitration administered by the Swiss Arbitration Centre under the Swiss Rules of International Arbitration in force at the time of the commencement of the arbitration. The seat of arbitration shall be Zurich. The arbitral tribunal shall consist of one arbitrator. The language of the arbitration shall be English. Each party shall bear its own costs, save as the tribunal may otherwise direct.
If any provision of this proposal is held to be invalid, illegal, or unenforceable in any jurisdiction, that provision shall, to the extent of the invalidity, illegality, or unenforceability, be deemed severed from this proposal in that jurisdiction only, and the remaining provisions shall continue in full force and effect.
Nothing in this proposal is intended to confer, or shall be construed as conferring, any rights or remedies on any person other than the Stake DAO Association and its members.
This proposal may be amended only by a subsequent proposal adopted in accordance with the Stake DAO governance framework. The Stake DAO Association reserves the right to take operational decisions consistent with the spirit of this proposal where strictly necessary to address technical, operational, regulatory, or security developments.
Official communications regarding this proposal will be published through the following channels: (i) the Stake DAO governance forum at gov.stakedao.org; (ii) the Stake DAO X/Twitter account @StakeDAOHQ; and (iii) the Stake DAO protocol front-end at stakedao.org. Holders are responsible for monitoring these channels.
This proposal does not contemplate the processing of personal data by the Stake DAO Association beyond the public on-chain data necessary for execution. To the extent any personal data is incidentally processed in connection with this proposal, such processing will be carried out in accordance with the Swiss Federal Act on Data Protection (FADP) and, where applicable, the EU General Data Protection Regulation (GDPR).
Each holder acknowledges that, in deciding whether to take any action in connection with this proposal, it has not relied on any statement, representation, or warranty (whether oral or written, express or implied) made by any Released Party other than as expressly set out in this proposal.
Vote
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For (Yes): Approve the sunset of Stake DAO related products following Balancer’s veBAL revamp.
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Against (No): Reject the proposal.
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Abstain: Take no position.
| Parameter | Value |
|---|---|
| Forum debate period | 3 days minimum |
| Voting period | 7 days |
| Debate and vote | Sequential (debate first, then vote) |
| Quorum | 15% of total vlSDT supply |
| Approval threshold | Simple majority (>50% of votes cast, excl. abstentions) |
| Anticipated execution | If super-quorum is reached |
References
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BIP-919: Discussion - Snapshot
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BIP-920: Discussion - Snapshot
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Votemarket: https://votemarket.stakedao.org
This proposal follows the Stake DAO Proposal Framework.