According to Andre Cronje, founder of the DeFi platform Flying Tulip and creator of the Fantom network, most decentralized finance (DeFi) protocols have lost genuine decentralization.
"I don't think DeFi exists anymore outside of these very small niches," Cronje told Cointelegraph during a Chain Reaction broadcast on X Spaces.
He argued that "real DeFi" must be decentralized, immutable, and function without intermediaries: "That statement actually isn't true for almost any other protocol running today."
Cronje has been raising this issue for several months. Earlier this year, he stated that a significant portion of DeFi "is no longer DeFi" in the strict sense, as developers debate the need for kill switches and other emergency governance mechanisms to protect users from exploits.
The total value locked (TVL) in DeFi has more than halved over the last 10 months — from $167 billion in early October 2025 to $75 billion at the time of writing, according to DefiLlama.
DeFi TVL, all-time chart. Source: DefiLlama
Cronje is not alone in his views. The European Central Bank has also questioned whether decentralized autonomous organizations (DAOs) are decentralized enough to remain outside the scope of regulation. In a March working paper, the ECB examined Aave, MakerDAO, Ampleforth, and Uniswap and found that the top 100 governance token holders controlled over 80% of the supply in each protocol. The conclusion is based on asset distribution snapshots from November 2022 and May 2023.
The authors of the ECB paper stated that these findings call into question the inherent decentralization of DAOs and the question of whether such organizations should remain outside the scope of the EU's Markets in Crypto-Assets Regulation (MiCA) as "fully decentralized" services.
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DeFi Has Moved Away From Decentralization
Cronje argued that DeFi has moved away from its inherent decentralization and evolved into a new financial paradigm called "on-chain finance" or "open finance." In support of this view, he said:
"We moved away from [DeFi] a long time ago. Because now your intermediary is a company: it makes decisions, performs curation functions, and sits on the risk committee. All of these are traditional elements familiar to us from the banking sector."
At the same time, Cronje stated that real DeFi still has a place, adding that he still sees genuine innovation in some DeFi protocols.
Cronje is one of the most respected founders in the DeFi space. The Sonic blockchain he created claims to be the fastest network based on the Ethereum Virtual Machine: in testnet, it achieved "true" finality in 720 milliseconds.
Cronje previously founded Yearn.finance and the Keep3r network.
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