Most DeFi protocols have abandoned true decentralization, according to Andre Cronje, founder of Flying Tulip and former Fantom technical architect. The sector has evolved into what Cronje calls "onchain finance" or "open finance"—a model that prioritizes user protection and capital efficiency over the immutability and intermediary-free operation that defined early DeFi.
"True DeFi requires decentralization, immutability and the absence of intermediaries," Cronje said. "I don't think DeFi exists anymore outside of those very small niches."
The shift reflects a practical trade-off: circuit breakers and emergency controls have become standard across major protocols to safeguard users from exploits, a move that inherently compromises strict decentralization. DeFi's total value locked has halved over 10 months, dropping from $167 billion in early October 2025 to $75 billion as of Aug. 13, 2026, according to DefiLlama data.
Cronje's critique aligns with recent research from the European Central Bank. A March working paper examined whether major DAOs maintain sufficient decentralization to remain outside regulatory oversight, analyzing Aave, MakerDAO, Ampleforth and Uniswap. The ECB found that the top 100 governance token holders controlled more than 80 percent of the supply in each protocol, based on holdings snapshots from November 2022 and May 2023.
Those findings prompted the ECB authors to question whether these DAOs qualify as "fully decentralized" services, with potential implications under the bloc's Markets in Crypto-Assets Regulation (MiCA).
Cronje has maintained this position for several months, earlier this year describing much of DeFi as "no longer DeFi" in its original definition. Despite his critique, he believes genuine innovation persists in some protocols and that the shift to onchain finance does not preclude the existence of truly decentralized projects.
Cronje's background includes founding Yearn.finance and the Keep3r Network. He served as chief technology officer at Sonic Labs, where he led the design of the Sonic blockchain, an Ethereum Virtual Machine chain that achieved 720-millisecond finality during testnet development.
