Cronje: 'DeFi Doesn't Exist Anymore,' Just Onchain Finance

Regulators are asking a similar question about who controls decentralized autonomous organizations, or DAOs. A March working paper from the European Central Bank examined Aave, MakerDAO, Ampleforth and Uniswap and found that the top 100 governance token holders controlled more than 80% of each protocol's supply. The holdings snapshots date to November 2022 and May 2023, both taken before the recent slide in locked value.

The ECB authors said the concentration means a small set of wallets can steer governance decisions, a result that presses on the "fully decentralized" label keeping such services outside MiCA, the EU's Markets in Crypto-Assets Regulation. They said the finding calls into question whether the four protocols should remain outside the bloc's rules as "fully decentralized" services.

Cronje said true DeFi has given way to a category he calls "onchain finance or open finance." The label, he said, describes where assets settle rather than who controls the system. Control is the real dividing line, in his telling: true DeFi runs without an intermediary and without emergency controls, while most protocols today hold some version of those levers. He said the shift does not erase true DeFi, and he still sees real innovation among a few protocols.

Yearn.finance and the Keep3r Network made Cronje one of the most respected founders in the sector.

Sonic, his blockchain project, claims to be the fastest Ethereum Virtual Machine chain, reaching a "true" 720-millisecond finality in a testnet environment.