DeFi Developer Andre Cronje Teases New Regulation-Focused Crypto Projects

The mercurial “Godfather of DeFi” is now pivoting to compliant crypto after abruptly quitting decentralized finance in early March.

AccessTimeIconApr 19, 2022 at 6:47 p.m. UTC
Updated May 11, 2023 at 5:31 p.m. UTC
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Prolific decentralized finance (DeFi) developer Andre Cronje appears to be back in crypto after abruptly quitting the industry last month.

Before DeFi degens rejoice, Cronje says he’s not interested in pioneering new tokenomic models or launching triple-digit yield farms. Instead, he’s set his sights on a tamer area – regulated crypto.

In a blog post published Tuesday, Cronje announced that he and his unnamed collaborators were working on several projects focused on crypto compliance and regulation. The list includes areas such as compliant custody products, risk reporting and state-supported national blockchains.

“Instead of trying to fight regulatory bodies because of crypto regulation, we should be trying to engage and educate on regulated crypto,” wrote Cronje, who added that on-boarding institutions would be one of his main goals.

Degen to defender

Cronje’s new focus is a far cry from his previous DeFi projects, which include platforms such as Solidly and Yearn Finance, among dozens of others.

While his projects are deployed across several different layer-1 blockchains, Cronje had a reputation for building protocols that allowed DeFi participants to take greater risks for higher yield and introducing complex tokenomic models.

On March 6, Cronje’s collaborator Anton Nell tweeted that the pair would be “closing the chapter of contributing to the defi/crypto space,” an announcement that sent the tokens of several DeFi protocols tumbling.

Since then, Cronje has stayed out of the limelight, leading many to speculate whether he would ever return to crypto.

Cronje’s new interest in regulation appears to reflect his new (and less idealistic) outlook on the entire industry.

In a previous blog post published on Monday – his first since going on hiatus – Cronje unleashed veiled criticism of the DeFi market, saying crypto was “repeating” the mistakes of previous monetary policymakers.

“I often feel that a lot of what is being built in crypto is being built by people that read a Wikipedia article on bonds, or seigniorage, or debt instruments and then thought to themselves, ‘they can do this better,’” Cronje wrote.

The DeFi movement began with a group of high-minded crypto developers who wanted to create a new, trustless financial system that solved many of the problems they saw in the legacy financial system.

Now, Cronje is not so sure crypto can build it better, saying the complexities of monetary policy “exist for a reason.” He also cited disdain for crypto culture’s focus on greed and ego, as the DeFi sector in the past two years minted a new class of crypto wealth.

Cronje, ironically himself one of the most prolific builders in crypto, appears to have learned this lesson, writing, “There is an irony in having come full circle.”

Crypto regulation vs. regulated crypto

The solution, Cronje concluded, is greater regulation “not as a mechanism to prevent, but as a mechanism to protect.”

In his Tuesday post, Cronje called crypto regulation “simply infeasible,” calling out public blockchains as having no domain, and therefore “should be guided by Maritime Law.”

Cronje, however, called regulated crypto (which includes entities such as exchanges, publicly listed crypto funds and other infrastructure components of the legacy financial system) “very feasible.”

The shift toward greater compliance in the DeFi market also comes as crypto exchange Uniswap battles a class-action lawsuit and the sector continues to be beset by nine-figure hacks with alarming frequency.

“It’s like a child trying to stick their finger into an electric outlet; you stop them, before they can learn why they shouldn’t,” Cronje wrote. “One day they will understand, but not today.”

Cronje didn't immediately respond to a request for comment.


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Tracy Wang

Tracy was the deputy managing editor at CoinDesk. She owns BTC, ETH, MINA, ENS and some NFTs.

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