Fantom founder Andre Cronje argues most DeFi protocols have become centralized entities, citing 55% TVL decline from Oct. 2022 to present.
Regulation & Gov ·
Andre Cronje contended that decentralized finance has effectively ceased to exist as a category, replaced by what he terms "onchain finance." Cronje, known for his work in the sector, argued that most DeFi protocols now operate as centralized, company-controlled entities with boards, risk committees, and gatekeepers—mirroring traditional finance structures rather than embodying genuine decentralization. He pointed to DefiLlama metrics showing total value locked across DeFi collapsed from $167 billion in October 2022 to $75 billion presently, a 55 percent decline.
The critique aligns with regulatory scrutiny from other quarters. The European Central Bank examined major protocols including Aave, MakerDAO, Ampleforth, and Uniswap, concluding that the largest 100 governance token holders commanded over 80 percent of supply in each case based on snapshots taken between November 2022 and May 2023. Those findings prompted ECB researchers to question whether such systems qualify as "fully decentralized" services exempt from oversight under the bloc's Markets in Crypto-Assets Regulation.
Cronje acknowledged that genuine innovation persists within certain DeFi projects despite the broader trend toward centralization. The debate remains unresolved around how regulators will classify protocol governance structures and whether token holder concentration alone determines regulatory treatment.