The Andre Cronje onchain finance argument has been circulating for months, but a body of data is catching up with it. Speaking during a Chain Reaction X Spaces session on Thursday, Cronje put it bluntly: ‘I don’t think DeFi exists anymore outside of those very small niches.’
Cronje, who serves as chief technology officer at Sonic Labs per Cointelegraph and is also the founder of Flying Tulip, a unified onchain financial system that launched on 23 February 2026, argues that what passes for DeFi today has quietly become something else: onchain finance, or open finance, governed by committees, companies, and curators rather than code.
What Cronje Actually Means by Onchain Finance
‘True DeFi,’ in Cronje’s framing, requires three properties: decentralisation, immutability, and the absence of an intermediary. By that standard, he argues the category is almost empty. ‘We’ve long since moved on from [DeFi]. Because your intermediary now is a company, it’s a decision maker, it’s a curator, it’s a risk committee, it’s all the traditional kind of things we saw in banking.’
The debate over circuit breakers and emergency pause functions has sharpened this question. Builders who add emergency controls to protect users from exploits are, by Cronje’s own definition, introducing an intermediary, however well-intentioned.
TVL tells part of the story. According to DefiLlama, total value locked across DeFi protocols has dropped from $167 billion in early October 2025 to $75 billion at the time of writing, a decline of more than half in ten months. User engagement has tracked the same direction: Best Wallet, citing DefiLlama data, reports that monthly unique wallets interacting with DeFi protocols peaked at 27 million before more than halving to 13.5 million in September 2025, the lowest figure in twelve months.
Andre Cronje Onchain Finance View Finds an Unlikely Ally in the ECB
The ECB Working Paper No. 3208 arrived at structurally similar conclusions from a regulatory direction. Examining Aave, MakerDAO, Ampleforth, and Uniswap, the ECB found that the top 100 governance token holders controlled more than 80% of supply in each protocol, based on holdings snapshots from November 2022 and May 2023.
The paper reviewed 248 governance proposals in total and also analysed the top 20 voters across all four protocols. Its broader finding was that, for most protocols studied, around half or more of all governance token holdings could be attributed to addresses associated with either the protocols themselves or with centralised and decentralised exchanges.
According to The Defiant, protocol-associated addresses held 43% of Uniswap’s UNI supply. Centralised exchange holdings were particularly concentrated at Aave (16%) and Ampleforth (19%), with Binance emerging as the dominant exchange holder across all four protocols, holding between 2% and 15% of total supply. The ECB researchers noted that available data does not distinguish between tokens held by exchanges on their own account versus tokens held in custody for customers, a caveat that limits how firmly any conclusion can be drawn.
The ECB’s policy concern follows directly from these numbers. The authors questioned whether DAOs with this degree of concentration can legitimately claim to be ‘fully decentralised’ services, which is the designation that currently places them outside the bloc’s Markets in Crypto-Assets Regulation (MiCA).
What Still Qualifies as True DeFi
Cronje is not arguing that the original model is extinct, only that it has been marginalised. He acknowledged that genuine innovation continues in a small subset of protocols that have held to the original design principles. Flying Tulip, which integrates spot trading, lending, perpetual futures, insurance, and a stablecoin (ftUSD) into a single protocol architecture and is rolling out in guarded stages, represents his own attempt to build within the onchain finance paradigm he now describes.
Cronje previously founded Yearn.finance and the Keep3r Network. Sonic Labs, where he serves as CTO, claims 720-millisecond finality on its EVM chain, achieved in a testnet environment.
The practical question for protocols sitting in the middle ground is whether MiCA compliance eventually forces an explicit choice: register as a regulated intermediary or strip out the controls that made you compliant enough to operate. That binary is where the onchain finance taxonomy starts to have real legal weight, not just conceptual tidiness.
