Andre Cronje, founder of the DeFi platform Flying Tulip and creator of the Fantom Network, has stated that most decentralized finance protocols no longer meet the original standards of true DeFi. Speaking on Thursday during Cointelegraph’s Chain Reaction X Spaces event, Cronje argued that genuine DeFi requires decentralization, immutability, and the absence of intermediaries—criteria he believes few current systems satisfy.

Cronje, who previously founded Yearn.finance and the Keep3r Network, said true DeFi now exists only in limited niches. He described the broader sector’s evolution as a move toward “onchain finance or open finance,” where traditional banking-style roles have reappeared in new forms.

He added that a protocol qualifies as true DeFi only if it remains decentralized, immutable, and free of intermediaries, noting that this description does not apply to nearly any protocols operating today.

Intermediaries Return in New Forms

Cronje explained that decision-making power has shifted back toward centralized actors even within systems marketed as decentralized. Companies, curators, risk committees, and other entities now perform functions similar to those long associated with conventional finance.

The comments build on points Cronje has raised earlier in the year, when he said much of DeFi was “no longer DeFi” in the strict sense. That earlier discussion centered on whether circuit breakers and other emergency controls, introduced to protect users from exploits, compromise the immutability expected of decentralized systems. Such mechanisms raise practical questions about who can activate them and how much discretionary authority they introduce.

Cronje stopped short of declaring the entire concept obsolete. He noted that genuine innovation consistent with the original DeFi principles continues in certain protocols, even as the wider ecosystem has adopted a different model.

Sharp Decline in Total Value Locked

Market data provides additional context for the discussion. According to DefiLlama figures referenced in connection with the event, total value locked in DeFi stood at about $75 billion, down from roughly $167 billion in early October 2025. The contraction represents a decline of more than half over approximately ten months.

Falling TVL does not by itself prove decentralization has failed. It does, however, coincide with greater attention on governance concentration and operational dependencies as capital flows have slowed and risk considerations have grown more prominent.

Regulatory Scrutiny of DAO Governance

Cronje’s assessment aligns with concerns raised by institutional researchers. In a March working paper, the European Central Bank examined whether decentralized autonomous organizations are decentralized enough to remain outside regulatory frameworks. The analysis covered Aave, MakerDAO, Ampleforth, and Uniswap.

Based on governance token holdings snapshots from November 2022 and May 2023, the top 100 token holders controlled more than 80 percent of the supply in each of those protocols. The ECB authors said the findings challenge assumptions of inherent decentralization and raise questions about whether such systems should qualify as “fully decentralized” services under Europe’s Markets in Crypto-Assets Regulation.

The combination of concentrated voting power, discretionary emergency controls, and declining activity has intensified debate over how decentralization should be measured in practice. Protocol designers and market participants face growing pressure to demonstrate that decision-making authority is genuinely distributed and that intervention rights are constrained in ways that can be independently evaluated.

As builders continue to balance security needs against decentralization claims, and as policymakers assess the practical reach of token-based governance, the distinction between original DeFi ideals and current onchain finance structures remains a central point of discussion across the industry.