DeFi Sector Loses Its Decentralized Roots

Andre Cronje, the founder of Flying Tulip and creator of the Fantom Network, says that the decentralized finance sector has largely abandoned its core principles. He claims that most DeFi protocols now operate like traditional financial institutions layered on top of blockchain rails.

Cronje argues that true DeFi requires systems to be decentralized, immutable, and free of intermediaries, standards he believes almost no major protocol meets today.

The European Central Bank has raised concerns about the governance structure of top DeFi protocols. In a March working paper, researchers found that the top 100 token holders controlled more than 80% of supply in Aave, MakerDAO, Ampleforth, and Uniswap.

Cronje's comments come as DeFi activity contracts sharply, with total value locked across DeFi protocols falling to $75 billion from $167 billion in early October 2025, a decline of more than 55% over approximately ten months.