Most decentralized finance (DeFi) protocols are no longer truly decentralized, according to industry pioneer Andre Cronje, the founder of the DeFi platform Flying Tulip and the technical architect who led the development of Fantom’s working network.
Speaking during an appearance on Cointelegraph’s Chain Reaction X Spaces show, Cronje delivered a blunt assessment of the current state of the blockchain industry. He argued that the original ethos of decentralized finance has largely been abandoned by contemporary builders in favor of centralized operational structures that mimic traditional banking.
"I don’t think DeFi exists anymore outside of those very small niches," Cronje told listeners during the broadcast. He elaborated that true, authentic decentralized finance requires a strict adherence to complete decentralization, immutability, and the absolute absence of intermediaries. "That statement isn’t really true for pretty much any other protocols running today," he added.
This perspective is not entirely new for Cronje, who has raised similar concerns on multiple occasions over the past year. Earlier in the year, he publicly stated that much of the modern DeFi sector is "no longer DeFi" in the literal sense. This realization has intensified as builders and developers increasingly debate whether emergency controls, such as circuit breakers and administrative pause buttons, have become necessary to protect user funds from sophisticated exploits and protocol failures.
The debate over centralization coincides with a significant contraction in the sector’s financial metrics. According to data from DefiLlama, the total value locked (TVL) across all DeFi protocols more than halved over a recent ten-month period, dropping sharply to $75 billion from a peak of $167 billion recorded in early October 2025. This steep decline has prompted many industry observers to re-evaluate the resilience, utility, and actual decentralization of the applications that form the backbone of the decentralized economy.
Cronje is far from alone in questioning whether decentralized autonomous organizations (DAOs) and governance structures live up to their decentralization labels. Institutional watchdogs have also cast a skeptical eye on the sector. Earlier this year, the European Central Bank (Apec) published a working paper examining major protocols such as Aave, MakerDAO, Ampleforth, and Uniswap.
The ECB’s research revealed that in each of these protocols, the top 100 governance token holders controlled more than 80% of the total token supply, based on holdings snapshots taken between November 2022 and May 2023. The authors of the ECB paper argued that such extreme concentration calls into question the inherent decentralization of DAOs. Furthermore, the findings raised critical questions regarding whether these entities should continue to remain outside the regulatory scope of the bloc’s sweeping Markets in Crypto-Assets Regulation (MiCA) as "fully decentralized" services.
DeFi Departed from Decentralization
Expanding on his critique during the Chain Reaction X Spaces session, Cronje contended that the broader industry has fundamentally departed from its foundational decentralization. Instead, he believes the ecosystem has evolved into an entirely different financial paradigm, which he categorizes as "onchain finance or open finance."
To support this assertion, Cronje pointed to the changing nature of protocol governance and operational oversight, noting that the decentralized ideal has been quietly replaced by familiar corporate hierarchies. "We’ve long since moved on from [DeFi]," Cronje explained. "Because your intermediary now is a company, it’s a decision maker, it’s a curator, it’s a risk committee, it’s all the traditional kind of things we saw in banking."
Despite his stark critique of the current market landscape, Cronje clarified that his remarks do not mean true decentralized finance is permanently dead. He noted that he still observes genuine innovation taking place among a select group of niche protocols that continue to strive for the original ideals of decentralization and trustlessness.
Cronje remains one of the most widely recognized and influential figures in the decentralized finance space. His career includes founding several landmark protocols that shaped the industry, including Yearn.finance and the Keep3r Network. More recently, he led the design and development of the Sonic blockchain as the chief technology officer of Sonic Labs. The Sonic network has made significant technical waves, claiming to be the fastest Ethereum Virtual Machine (EVM) compatible chain after achieving a "true" 720-millisecond finality time in a testnet environment.
