TL;DR
- Andre Cronje claims that the DeFi sector no longer exists in its original form and that most protocols have migrated to “onchain finance.”
- The total value locked in decentralized protocols fell from $167 billion in October 2025 to $75 billion in August 2026.
- The ECB analyzed Aave, MakerDAO, Ampleforth, and Uniswap, and found that the top 100 holders control more than 80% of governance.
DeFi is going through an identity crisis according to Andre Cronje, founder of Flying Tulip and creator of Fantom Network, who stated that the decentralized ecosystem as it was originally conceived no longer exists.
“I don’t think DeFi exists anymore outside of those very small niches,” Cronje declared during the Chain Reaction X Spaces show on Thursday, August 14, in conversation with Cointelegraph. In his view, genuine decentralized finance requires three conditions: real decentralization, immutability, and the absence of intermediaries. No relevant protocol currently active meets all three simultaneously, according to his analysis.
🎙️ "I don't think DeFi exists anymore outside of very small niches."@rkbaggs sat down with @AndreCronjeTech, founder of @flyingtulip_, to talk about the evolution of DeFi and how immutability has gone from a feature to a bug.#CHAINREACTION pic.twitter.com/aga10hXurZ
— Cointelegraph (@Cointelegraph) August 13, 2026
This is not the first time Cronje has addressed this issue. In early 2026 he had already pointed out that much of the ecosystem had abandoned its essence, amid a debate among developers over whether emergency mechanisms such as circuit breakers are necessary to protect users from exploits. That discussion, for Cronje, is precisely the evidence of the problem: incorporating risk committees, curators, and decision-makers reproduces the logic of traditional banking under a decentralized interface.
Onchain DeFi and the End of Real Decentralization
Cronje frames this process within what he calls “onchain finance” or “open finance,” a distinct paradigm that operates on the blockchain but does not retain the original properties of the DeFi movement. Even so, Cronje acknowledged that initiatives with genuine innovation still exist in specific niches, though he considered them exceptions to a trend that dominates the market.
The data supports part of his diagnosis. According to DefiLlama, the total value locked in decentralized protocols fell from $167 billion in October 2025 to $75 billion, a reduction of more than 50% in ten months.
The European Central Bank reached similar conclusions from a regulatory standpoint. In a document published in March, the ECB analyzed four protocols, including Aave and Uniswap, and concluded that the top 100 holders of governance tokens controlled more than 80% of the supply in each case. The authors questioned whether these organizations deserve to continue being classified as “fully decentralized services” under the European Union’s MiCA framework.
