Andre Cronje, founder of Flying Tulip and creator of Fantom, said on Cointelegraph’s Chain Reaction X Spaces that DeFi no longer exists outside a very small niche, and that the sector should now be described as 「onchain finance」 or 「open finance」 instead.
Cronje said a system only counts as 「true DeFi」 if it meets three conditions at the same time: decentralization, immutability and the absence of intermediaries. By that definition, he said, almost none of the protocols operating today qualify.
Intermediaries did not disappear, he said, they changed form
Cronje’s argument is that DeFi has moved away from its original decentralized structure and turned into something else. The intermediary is still there, he said, but now appears as a company, a decision-maker, a vault curator or a risk committee.
He said: 「We have long moved past DeFi. Because your intermediary is now a company, it is the decision-maker, it is the vault manager, it is the risk committee, all the traditional roles we used to see in banking.」
The article said that one of the dominant structures in onchain lending over the past two years has been curator-led vaults. In that setup, the curator decides which markets receive vault capital and what risk parameters apply, while depositors mainly provide the funds. Curators collect fees based on assets under management and returns, but depositors bear the full tail risk if things go wrong.
That lending model has already seen failures
The report said this is not only a theoretical concern. In November 2025, the collapse of Stream Finance triggered a chain reaction that hit three major lending platforms, while utilization on multiple vaults on Morpho and Euler briefly climbed to 100%.
In that framing, the risk-committee and intermediary problem described by Cronje has already surfaced onchain more than once.
Cronje included Flying Tulip in the critique
This is not the first time Cronje has made the case. The report said that in April this year, he argued that most DeFi is no longer DeFi because protocols now commonly rely on proxy-contract upgrades, multisigs, infrastructure providers, governance processes and manual incident-response teams.
At that time, he also included his own project in the same category, saying: 「I believe what we have today, including Flying Tulip, is no longer DeFi. It is not decentralized finance, and it is not immutable code.」
Cronje has also supported designs that allow intervention. Flying Tulip added a withdrawal circuit breaker that can pause withdrawals for about six hours during abnormal outflows, giving the team time to respond. The mechanism conflicts directly with the immutability standard he set out, but the article said he chose to acknowledge that tension and prioritize operational control over describing the protocol as immutable.
Not everyone agrees with that approach. Curve founder Michael Egorov opposed circuit breakers on the grounds that any switch controlled by humans creates a fresh attack surface. He said: 「If the signers are compromised, the security mechanism becomes an ATM for hackers.」
ECB paper questioned whether DAOs are truly decentralized
Cronje is not alone in doubting how decentralized DeFi governance really is. A working paper published by the European Central Bank on March 26 questioned whether DAOs are decentralized enough and whether they should remain outside the regulatory perimeter.
The research examined Aave, MakerDAO, Ampleforth and Uniswap, and found that the top 100 governance token holders in each protocol controlled more than 80% of supply.
Voting power was even more concentrated. According to the report, the top 20 voters in Ampleforth held 96% of delegated voting power, the top 10 in MakerDAO held 66%, and the top 18 in Uniswap held 52%. It also said that roughly one-third of major voters could not be identified.
The ECB said those findings leave an unresolved legal question over whether DAOs should be excluded from the EU’s Markets in Crypto-Assets regulation, or MiCA, as 「fully decentralized」 services.
DeFi TVL fell 55% in 10 months
The capital picture also weakened sharply. DefiLlama data showed DeFi total value locked reached $167.1 billion on Oct. 8, 2025, just 6% below the all-time high of $177.5 billion recorded in November 2021.
It then moved lower and stood at $75.1 billion at the time of writing, a decline of 55% over 10 months.
Cronje said true DeFi still exists, but only in a small set of protocols
Cronje did not say genuine DeFi has disappeared entirely. He said he still sees real innovation in some protocols. But under his own definition, the list is very short.
What Cronje means by onchain finance versus DeFi
Under Cronje’s framework, the difference comes down to intermediaries. True DeFi must be decentralized, immutable and free of intermediaries at the same time. Most current protocols, he argued, have companies, curators and risk committees making decisions behind the scenes, which makes them functionally closer to traditional finance moved onto blockchain rails.
What a DeFi vault curator does
The article said a curator decides how vault capital is allocated across lending markets and sets risk parameters, while collecting fees based on scale and performance. If the vault later suffers bad debt, losses are usually borne by depositors, while the curator and protocol generally do not compensate them. That is one of the intermediary problems Cronje highlighted.