Cronje: Most DeFi Has Become 'Onchain Finance'

Andre Cronje is blunt about it. Most DeFi protocols, he says, aren't really DeFi anymore – they've become something else entirely, something he calls "onchain finance." And he's not happy about what got lost along the way.

Cronje, founder of Flying Tulip and the Fantom Network, made the remarks during a recent appearance on the Chain Reaction X Spaces show. His core argument is pretty simple: true DeFi runs without intermediaries, full stop. No kill switches. No emergency controls. No small group of insiders quietly holding the levers. That's not what most protocols look like today, he says. The features that were supposed to protect users – circuit breakers and similar mechanisms – are basically proof that the decentralization ideal has already been compromised. You can't have an emergency shutdown button and call yourself decentralized. The two ideas don't really coexist.

Total value locked across DeFi protocols fell from $167 billion in October 2025 to $75 billion currently, per DefiLlama. That's a brutal drop. It's not just a market correction – it tracks with a broader loss of confidence in the sector's original promises. Cronje isn't claiming the crash caused the identity crisis. The timing is hard to ignore. When capital leaves that fast, it usually means trust left first.

The trust problem is structural, not just cyclical. Cronje's argument is that protocols started making pragmatic concessions – adding protective layers, giving developers override powers, building in governance controls – and each concession chipped away at the immutability that made DeFi interesting in the first place. Immutability was the whole point. Code was law. Now, apparently, code is more like a draft that someone can still edit.

He's not saying every project sold out. He acknowledged that some protocols still operate without intermediaries and stay true to the original principles. Innovation is still happening in certain corners of the space. Those are the exceptions, not the rule.

Cronje isn't alone in pointing this out. The European Central Bank published a working paper in March that looked hard at several major decentralized autonomous organizations, including Aave and MakerDAO. What the ECB found probably didn't surprise Cronje: a small group of token holders controls a large portion of governance power in these organizations. The concentration is significant enough that the ECB questioned whether these DAOs can even qualify as "fully decentralized" under the Markets in Crypto-Assets Regulation – MiCA – which is now the governing framework across Europe.

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That's a real regulatory problem, not a theoretical one. If regulators decide that governance token concentration disqualifies a protocol from decentralized status, the legal and compliance implications get messy fast. MiCA draws distinctions between decentralized and centralized crypto services, and where a protocol lands on that spectrum affects everything from licensing requirements to liability. The ECB findings suggest existing structures may not hold up under that kind of scrutiny.

Cronje's critique isn't just philosophical. It's got regulatory teeth now.