May 2025 marks a turning point for the dapp industry. With user activity rising, DeFi regaining strength, and AI solidifying its role in Web3, the ecosystem showed signs of stability and maturation. From market recoveries to infrastructure upgrades and shifting user preferences, this month highlighted how decentralized applications are evolving — not just in hype cycles, but in long-term utility.
Key Takeaways
- 25M daily active wallets in May, up 8% signaling healthy, ecosystem-wide growth.
- DeFi TVL rose 25% to hit $200B, fueled by Ethereum’s 40% price surge and Hyperliquid’s $244B trading volume.
- NFT trading volume jumped 40% to $280M, with sales up 35% driven by Ethereum, Abstract, and Telegram-linked domains.
- AI dapps reached 4.8M dUAW, up 23%, now rivaling DeFi and gaming in user engagement.
- $275M lost to Web3 exploits – 3rd highest month in a year, surpassing Nov–Mar combined.
Table of Contents
- 25M dUAW mark signals healthy growth in the dapp industry
- Top dapps by UAW: from meme hype to utility-driven growth
- DeFi on the rise: TVL climbs 25%
- AI in Web3: momentum grows as public calls for decentralized intelligence
- NFT industry sees 40% growth — real recovery or short-term spike?
- $275M lost this month across Web3
- Closing words
1. 25M dUAW mark signals healthy growth in the dapp industry
The dapp industry showed clear signs of renewed optimism in May, with daily Unique Active Wallets (dUAW) increasing by 8%, reaching 25 million. This growth is in line with the broader market sentiment, supported by recoveries in DeFi and NFT activity, as explored in the following chapters.
Three sectors stood out this month with consistent and noteworthy growth:
- AI dapps surged by 23%, reaching 4.8 million dUAW
- Social dapps increased by 21%, hitting 4.3 million dUAW
- NFT dapps grew by 9%, totaling 3.9 million dUAW
These gains not only show increased sector-level traction, but also contribute to a more balanced ecosystem. We’re witnessing AI, DeFi, and Gaming dapps converging in dominance, with each accounting for a relatively similar share of user activity.
Beyond the rise in user activity across AI, DeFi, and Gaming, one emerging trend worth watching closely is InfoFi — the financialization of data and information in the Web3 space. While AI continues to capture mainstream attention, InfoFi is quietly shaping a new layer of the decentralized stack. This movement enables users, protocols, and AI agents to buy, sell, stake, lend, or borrow data, insights, and models, often leveraging blockchain for provenance, transparency, and monetization. Much like how SocialFi redefined user engagement, InfoFi is now building the infrastructure for data to become an active financial asset. We believe this is a long-term trend, and we’ll be exploring it in more depth in an upcoming special report.
This diversification of user engagement marks an important milestone. A healthy and maturing dapp ecosystem is one where multiple verticals can thrive simultaneously and not just during hype cycles but through sustained utility, community adoption, and platform evolution.
While AI has been the prevailing narrative across industries, on-chain data is now backing up the hype. With AI dapps now rivaling DeFi and Gaming in daily wallet activity, it’s evident that artificial intelligence is becoming deeply embedded in the blockchain experience, from productivity tools and agents to social and marketing utilities.
May’s onchain activity signals a stronger, more diversified dapp ecosystem. As user attention spreads more evenly across sectors, and as emerging technologies like AI become more integrated, the Web3 landscape continues its evolution towards a more robust and sustainable infrastructure.
2. Top dapps by UAW: from meme hype to utility-driven growth
User engagement patterns in May revealed a gradual shift from speculative hype toward more utility-oriented dapps. While April’s memecoin frenzy, led by platforms like Pump.fun, captured massive attention, that momentum appears to be cooling. As of May, Pump.fun has slipped from its peak activity, signaling a potential saturation point for memecoin trading, at least for now.
In contrast, DeFi dapps saw notable increases in unique active wallets (UAW), particularly on Uniswap V2, which continues to benefit from strong activity on Base. A significant development came on May 4, when Uniswap announced its integration with Soneium, an entertainment-focused Layer-2 network developed by Sony Block Solutions and Startale. This move not only diversifies Uniswap’s L2 presence but also opens a new chapter in merging DeFi with entertainment and consumer tech.
In gaming, World of Dypians continued to dominate, maintaining its status as one of the most used gaming dapps month-over-month. Its immersive world-building and loyal community are proving to be long-term engagement drivers in a category often plagued by short-lived interest.
Meanwhile, on the AI and social front, SubHub gained momentum by combining personalized Web3 communications with AI-enhanced delivery infrastructure. Positioned at the intersection of messaging, wallets, and smart targeting, SubHub is emblematic of how AI dapps are beginning to build sticky user bases, rather than just riding hype cycles.
The performance of May’s top dapps reflects a broader trend: while speculative hype (e.g., memecoins) can rapidly drive user spikes, long-term retention is increasingly tied to utility and platform innovation. Whether it’s AI-powered communication, base-layer gaming engagement, or L2-powered DeFi expansion, the dapps climbing the charts today are those offering users more than just speculation, they offer purpose, accessibility, and functionality.
3. DeFi on the rise: TVL climbs 25%
DeFi continued its upward trajectory in May, with Total Value Locked (TVL) increasing by 25%, bringing the sector’s total to approximately $200 billion. This recovery is closely linked to the broader market upswing, particularly Bitcoin reaching a new all-time high and Ethereum’s price surging by 40%, both of which significantly boosted DeFi asset valuations and liquidity depth.
All major DeFi ecosystems recorded TVL gains, signaling renewed investor confidence and higher on-chain activity. Among them, one project in particular stood out.
The breakout performer this month was Hyperliquid, a decentralized exchange that achieved an astonishing $244 billion in trading volume, capturing ~10% of Binance’s market share. With this performance, Hyperliquid now ranks:
- Top 5 by trading volume across centralized and decentralized exchanges
- Top 10 by TVL across all blockchain networks
This marks a significant shift in how on-chain derivatives protocols are competing directly with major CeFi players, suggesting that decentralized perpetuals and derivatives are reaching maturity.
Beyond metrics, several important updates and policy moves shaped DeFi in May:
Ethereum’s Pectra Upgrade
This anticipated hard fork delivered two key enhancements:
- EIP-7702: Introduced account abstraction, enabling smart contract-like features for regular wallets, including batch transactions and gas fee sponsorship.
- EIP-7251: Raised the validator reward cap from 32 ETH to 2048 ETH, allowing for compounded staking rewards and better capital efficiency for institutional stakers.
XRP Ledger launches EURØP stablecoin
Ripple introduced EURØP, a euro-pegged stablecoin fully compliant with the EU’s MiCA regulation. This makes it the first major MiCA-compliant stablecoin signaling a new phase of regulatory-compliant DeFi.
U.S. GENIUS Act Advances
The U.S. Senate approved a cloture motion (66–32) for the bipartisan GENIUS Act, pushing forward federal regulation for stablecoin issuers. The bill’s advancement ends a long-standing filibuster and indicates growing regulatory momentum in Washington.
South Korea Eyes Crypto ETF Legalization
South Korea’s ruling party pledged to legalize spot crypto ETFs and relax banking restrictions on exchanges, a move that could significantly expand crypto accessibility in Asia’s highly engaged retail market.
As DeFi rebuilds its foundation, the combination of protocol-level upgrades, regulatory clarity, and market growth suggests a more mature and resilient future for decentralized finance. While risks remain, May 2025 proved that DeFi continues to evolve, both in terms of infrastructure and institutional relevance.
4. AI in Web3: momentum grows as public calls for decentralized intelligence
AI continues to dominate global conversations, and its impact on Web3 is only becoming more pronounced. As industries race to integrate artificial intelligence, AI-powered dapps are steadily establishing themselves within the decentralized ecosystem. Therefore this isn’t just hype, but it’s a trend, reflecting a broader societal shift toward open, user-owned technologies.
At DappRadar, we’ve been closely monitoring this evolution. The top-performing AI dapps this month remain largely consistent, highlighting the strong staying power of early market leaders.
The most notable newcomer to the rankings is SubHub, an AI-enhanced Web3 notification and marketing platform developed by Dmail. It’s designed to optimize how projects engage with audiences, enabling personalized message delivery via wallet addresses and decentralized identifiers (DIDs). Positioned at the intersection of AI, communication, and social dapps, SubHub reflects the growing need for autonomous, targeted, and decentralized outreach, especially as users become fatigued with traditional, centralized marketing models.
SubHub’s integration of smart messaging and wallet-based targeting also reinforces the narrative that Social and AI dapps are increasingly intertwined, enabling user-centric experiences across multiple layers of Web3 infrastructure.
Beyond dapps, this month saw significant advancements across the AI x blockchain space:
- ThinkAgents.ai unveiled an open-source “Think Agent Standard”, a protocol for deploying autonomous agents across decentralized networks — a step toward interoperable, onchain AI.
- Tether announced its entry into the AI space with plans to launch a decentralized AI platform, merging peer-to-peer communication with crypto-native integrations.
- Assisterr (Solana) raised $2.8M at a $75M valuation to support no-code deployment of Small Language Models (SLMs) — offering composable AI tooling without dev-heavy overhead.
- Donut Labs secured $7M in pre-seed funding to build the first “agentic” Web3 browser, combining AI functionality with crypto wallets and DEXs.
- BingX, a global exchange, committed $300 million over three years in its “AI Evolution” roadmap — integrating AI across its trading engine and ecosystem.
Perhaps most telling, though, is the growing public sentiment favoring decentralized AI. A Harris Poll commissioned by Digital Currency Group (May 29) revealed that:
- 77% of Americans believe decentralized AI would be more beneficial to society than centralized models.
- 56% would prefer AI development to occur via decentralized systems.
This data underscores a cultural shift, one that aligns with Web3’s ethos of transparency, user ownership, and anti-monopoly values.
As AI continues to shape Web3 infrastructure, we’re also preparing to contribute. Stay tuned, we’ll unveil more in the near future.
5. NFT industry sees 40% growth — real recovery or short-term spike?
The NFT market saw signs of life in May, with trading volume climbing to $280 million, representing a 40% month-over-month increase. Likewise, NFT sales count jumped by 35%, reaching 2.7 million transactions. While this growth offers a glimmer of optimism, it’s still too early to label this a full recovery. A sustainable trend would require consistent growth over multiple months, but a small win is still a win.
Ethereum saw a 30% increase in NFT trading volume, reclaiming dominance with a 53% share of the total NFT market. It was followed by Immutable zkEVM at 13%, and Abstract at 10%. Notably, Abstract recorded a staggering 1200% surge in trading volume, driven by speculative activity linked to farming and anticipated airdrops, highlighting how incentive mechanics continue to influence NFT market dynamics. This could be observed as the most popular collections have over one million trading volume per day, but the floor price remains around $300.
The strongest growth by sector came from Art-based NFTs, with collections like Good Vibes Club — an ART/PFP hybrid — fueling a significant uptick in volume. This was followed by a resurgence in domain NFTs, particularly TON- and Telegram-related domains, as Telegram-based dapps continue gaining traction. Their appeal lies in ease of access, gamified experiences, and low onboarding friction, suggesting that the intersection of messaging platforms and NFTs could become a long-term trend.
Several developments in May are poised to reshape the NFT landscape:
Apple drops 30% NFT tax on iOS
In a landmark move, Apple removed its 30% in-app fee for NFT transactions after legal pressure, reducing friction for NFT marketplaces integrated into iOS apps. This opens the door for wider mobile adoption of NFT platforms.
OpenSea launches OS 2.0
OpenSea debuted OS2, a revamped multichain marketplace that expands beyond NFTs to include fungible tokens and memecoins, offering support for 19 blockchains and streamlining minting, swapping, and trading into one unified experience.
FIFA Migrates NFT Platform to EVM
FIFA announced it will move its NFT platform from Algorand to a custom Ethereum-compatible chain, dubbed the FIFA Blockchain, enhancing scalability and wallet compatibility for fan collectibles via MetaMask and other EVM tools.
Tokenized Real-World Assets Gain Traction
Courtyard, a platform that tokenizes physical assets, has emerged as one of the top NFT collections by volume, surpassing $55 million in trading volume — showcasing the growing demand for RWA-based NFTs.
While enthusiasm is gradually returning to the NFT space, much of the volume is still influenced by airdrops, farming incentives, and speculative behavior. If this momentum holds for the next few months, it could signal the beginning of a new phase for NFTs — one that blends utility, accessibility, and real-world applications.
6. $275 million lost across Web3 this month
Although May saw fewer individual incidents compared to April, the damage inflicted by hacks and exploits remains deeply concerning. According to the REKT Database, over $275 million was lost across just 7 incidents, making it the third-highest month for losses in the past year, surpassing the combined totals of November, December, January, and March.
While the figure marks a 95% drop from April’s record-breaking exploits, largely due to the Mantra DAO incident, it would be misleading to view this as a sign of recovery. The severity of individual attacks in May highlights the ongoing systemic vulnerabilities within the dapp ecosystem.
Furthermore, let’s take a look at the exploits that stood out this month:
Cetus Protocol Exploit – $260M
On May 22, Cetus Protocol, the leading DEX on the Sui Network, was exploited in a massive attack that led to a $260 million loss. Token prices on the platform plunged, with some losing over 90% of their value, and the team responded by halting smart contract operations to contain the damage and launch an investigation.
Cork Protocol Exploit – ~$12M
On May 28, Cork Protocol suffered a smart contract vulnerability that resulted in the theft of 3,760 wstETH, worth around $12 million. The attack exposed critical flaws in contract logic, prompting immediate community alerts.
Mobius Token (MBU) Incident – ~$2.16M
On May 11, a suspicious interaction with an unverified contract led to $2.16 million in losses on Binance Smart Chain. While the incident resembles a classic exploit, signs point to a possible rugpull, further blurring the line between technical breach and malicious intent.
May’s data is a stark reminder that despite improvements in tooling and awareness, the Web3 space remains highly vulnerable. With multi-million dollar exploits continuing month after month, there is a pressing need for stronger auditing standards, real-time risk monitoring, and better education for both developers and users.
Security remains one of the most urgent challenges for the dapp ecosystem and May made that painfully clear.
7. Closing words
May 2025 marked a pivotal month for the dapp ecosystem, signaling a broad-based recovery and maturing industry dynamics. With 25 million daily active wallets, user engagement is trending upward, supported by growth across key verticals — DeFi, NFTs, AI, and Social.
The shift from hype-driven activity to utility-focused engagement is becoming clearer. While memecoins may have cooled, DeFi protocols like Hyperliquid and AI dapps like SubHub are rising in relevance, showing that users are gravitating toward platforms that offer functionality, innovation, and real value.
DeFi’s 25% TVL increase reflects renewed market confidence, bolstered by infrastructure upgrades and policy progress. In parallel, NFT trading surged 40%, with Ethereum regaining dominance and real-world assets entering the spotlight — a possible early sign of a broader utility-driven rebound. AI continues to gain ground, not only in public sentiment — with 77% of Americans preferring decentralized AI — but also in usage, rivaling gaming and DeFi in user activity.
In short, the dapp industry is moving from volatile experimentation toward foundational strength. With user activity diversifying and technologies like AI being meaningfully adopted, the ecosystem is entering a new phase — one defined not just by trends, but by infrastructure, balance, and long-term resilience.
