DeFi protocols have largely abandoned true decentralization and immutability, according to Andre Cronje, founder of Flying Tulip. Cronje contends the sector has evolved into what he calls "onchain finance." Total value locked across DeFi more than halved from $167 billion in early October 2025 to $75 billion by August 2026.
Cronje, technical architect of Fantom's network, said during a Chain Reaction X Spaces show that true DeFi exists only in small niches. He defines it as decentralized, immutable, and free of intermediaries. Most protocols today fail to meet these criteria, he said.
Cronje has raised concerns about decentralization erosion for months. The discussion often involves emergency controls like circuit breakers that builders deploy to protect users from exploits.
The European Central Bank's March working paper supports his assessment. The ECB examined governance concentration at Aave, MakerDAO, Ampleforth, and Uniswap using holdings snapshots from November 2022 and May 2023. The top 100 token holders controlled more than 80 percent of supply in each protocol.
The ECB concluded that such concentration undermines claims of DAO decentralization. The findings raise questions about whether these protocols should remain exempt from the bloc's Markets in Crypto-Assets Regulation (MiCA) as "fully decentralized" services.
Cronje characterizes the shift as a move toward "onchain finance" or "open finance," where protocols have sacrificed immutability and decentralization for other features.
Cronje is widely recognized within the DeFi space. He led design of the Sonic blockchain as chief technology officer of Sonic Labs, which claims 720-millisecond finality on a testnet. Before Flying Tulip and Sonic Labs, Cronje founded Yearn.finance, a yield aggregator, and Keep3r Network, a decentralized job-matching platform.
