February 2025 saw shifting trends in Web3, with AI, gaming, and Social dapps continuing to grow despite a slight decline in overall activity. DeFi faced a sharp downturn, while NFT trading volumes dropped, though AI-driven and sports collections gained momentum. The month also set a grim record for crypto hacks, highlighting the need for stronger security measures.
This report analyzes dapp activity, DeFi, NFTs, AI adoption, and security incidents, based on on-chain data from DappRadar-tracked dapps and chains. It does not include off-chain data or untracked ecosystems.
Key Takeaways
- Dapp activity cooled off, with daily unique active wallets (dUAW) dropping 8% to 24 million, though AI, Social, and NFT categories saw user growth.
- NFT trading volume plummeted 50% to $498 million, mirroring the broader crypto downturn, while AI-driven and sports NFT collections gained momentum.
- DeFi suffered a significant downturn, with TVL shrinking from $217B to $168B, as Ethereum and Solana led the declines due to capital outflows and shifting liquidity.
- Berachain emerged as the fastest-growing DeFi chain, reaching $5.05 billion in TVL
- AI-powered dapps surged in adoption, with some platforms experiencing over 700% growth, reinforcing AI’s dominance as Web3’s fastest-growing sector.
- February set a new record for crypto hacks, with $1.5 billion stolen, primarily due to the Bybit exchange breach ($1.4B)—the largest DeFi exploit in history.
Table of Contents
- Web3 activity declines, but AI, NFT, and Social sectors defy the trend
- Top dapps: shifting trends in Web3 adoption
- DeFi faces market volatility as new chains gain traction
- AI dapps surge: the fastest-growing sector in Web3
- NFT market takes a hit amid crypto downturn, but AI and Sports shine
- A record-breaking month for crypto hacks
- Closing words
1. Web3 activity declines, but AI, NFT, and Social sectors defy the trend
Dapp activity showed a slight cooldown in February, following January’s strong momentum. The total number of daily unique active wallets (dUAW) across all tracked dapps is estimated to have declined by 8%, settling at around 24 million.
Despite the overall dip in activity, DeFi remained the dominant category, continuing to attract the largest share of users. Around 27% of all active wallets engaged with DeFi applications throughout February, reinforcing its stronghold as the top-used dapp category. However, not all sectors followed the downward trend—Social, NFT, and AI saw growth, signaling evolving user interests.
Social dapps grew by 9%, reaching 2.8 million daily unique active wallets, while NFT activity climbed by 6%, with 3.5 million users interacting with NFT platforms. AI stood out as the fastest-growing sector for yet another month, surging by 16% and reaching 2.6 million dUAW, solidifying its position as Web3’s biggest ongoing trend.
From a blockchain perspective, Solana maintained its leadership in on-chain activity, registering the highest number of unique active wallets and transaction counts. This sustained engagement reflects the growing appeal of gaming dapps and memecoins that continue to launch on the network, making it a key hub for emerging trends.
Among the most notable surges in activity, Abstract stood out, recording an impressive 1,093% increase in user interactions since its integration last month. This rapid growth propelled Abstract to the 21st position in our Chain Rankings, highlighting its early traction in the space.
As the blockchain has only recently launched and the anticipation of airdrop rewards remains strong, we’ve put together an Abstract Token Airdrop Guide—a resource detailing potential actions users can take to maximize their participation, even though no official details have been confirmed yet.
For real-time insights and further analysis of Web3’s evolving landscape, our Narrative Pages, launched last month, serve as a central hub for tracking key industry trends. Whether you’re following developments in Gaming, DeFi, or AI, these dedicated pages provide rankings, analytics, and deep insights sourced from over 80 blockchains.
2. Top dapps: shifting trends in Web3 adoption
Analyzing the top dapps by unique active wallets in February reveals several key developments that highlight the evolving landscape of Web3.
Solana and NEAR continue to dominate in user activity, maintaining their positions as leading ecosystems despite minor fluctuations. Their dapps consistently attract high engagement, reinforcing their status as preferred platforms for developers and users alike.
Gaming and AI are emerging as the most dynamic sectors, with notable surges in adoption. LOL, a gaming dapp, saw a 40% increase in activity, while Alaya AI recorded an impressive 72% growth, underscoring the increasing demand for AI-powered Web3 experiences and interactive gaming platforms.
In DeFi, user behavior suggests a shift in priorities. Uniswap V3 experienced a decline in usage, while Uniswap V2 saw an uptick in activity, indicating that traders are optimizing for cost efficiency in their transactions.
Meanwhile, emerging chains are beginning to gain traction, introducing fresh competition to the dapp industry. Matchain, for instance, has made a strong entry into the market, with LOL leading the charge on the platform.
As Web3 continues to expand, these trends indicate a future where decentralized applications become even more integrated into everyday digital experiences.
3. DeFi faces market volatility as new chains gain traction
The decentralized finance (DeFi) sector faced a sharp downturn in February 2025, with total value locked (TVL) plummeting from $217 billion to $168 billion. This decline reflects broader market volatility, capital outflows, and liquidity shifts that impacted both dominant and emerging DeFi ecosystems.
Ethereum, the backbone of DeFi, saw its TVL drop by 27% to $97 billion, yet it retained over 57% of the sector’s total liquidity. The decline was largely driven by reduced liquidity in liquid staking protocols, which had previously been a major growth driver. Despite the downturn, Ethereum’s position as the primary DeFi hub remains unchallenged.
Solana experienced the most significant drop, with its TVL falling 33% to $15.4 billion. Following a strong January, the downturn may be attributed to profit-taking and liquidity migration toward more stable DeFi environments. Declining user activity on key protocols like Jupiter Exchange (-10% UAW) and Raydium (-39% UAW) further contributed to the drop, signaling reduced trading volume and liquidity provision.
Meanwhile, Berachain emerged as one of the fastest-growing DeFi ecosystems, reaching a TVL of $5.05 billion. The chain’s rise is fueled by its proof-of-liquidity model, which has attracted users through lucrative liquid staking and yield farming incentives. As users seek high returns despite broader market declines, Berachain is positioning itself as a key player in the evolving DeFi landscape.
Other notable trends include BNB Chain and Tron, both of which play crucial roles in stablecoin-based DeFi. BNB Chain maintained a relatively moderate 11% TVL decline, as stablecoin trading and lending continued to support liquidity. Tron, however, suffered a 29% drop, suggesting lower demand for USDT transactions and a broader decline in stablecoin settlements on-chain. In contrast to the overall DeFi slump, Aptos stood out as a rare gainer, growing its TVL by 6% to $1.83 billion.
4. AI dapps surge: the fastest-growing sector in Web3
February marked a significant milestone for AI-powered dapps, as engagement surged across multiple sectors, reinforcing the growing synergy between artificial intelligence and blockchain technology. Users are increasingly exploring AI-integrated social, gaming, and DeFi applications, driving a substantial rise in adoption. Unique Active Wallets (UAW) for AI-powered dapps skyrocketed, with some platforms experiencing over 700% growth in a single month—a testament to AI’s accelerating influence in the decentralized space.
Among the standout performers, LOL emerged as the most-used AI dapp, attracting 5.1 million UAW, a 40% increase, thanks to its interactive AI-driven social engagement features on Matchain. Meanwhile, Evermoon and UneMeta demonstrated staggering growth of +988% and +551%, respectively, highlighting the increasing demand for AI-powered gaming and NFT platforms. AI-generated art and creative tools are also gaining traction, with Fractal Visions recording an impressive 721% surge, showcasing the rising popularity of AI-generated NFTs.
Beyond entertainment and digital assets, AI’s role in financial and social applications continues to expand. Balance leveraging AI to enhance financial decision-making and community interactions, doubled its user base in February, growing by 116%. While some platforms, such as Dmail Network (-22%) and MomoAI (-40%), saw declines, the overall AI sector remains one of the fastest-growing categories in Web3.
5. NFT market takes a hit amid crypto downturn, but AI and Sports shine
The downturn in cryptocurrency prices has left its mark on the NFT sector, reflecting the broader market trend. While NFTs had been showing signs of a comeback in recent months, their momentum has slowed since the start of the year. In February, total NFT trading volume fell to $498 million, a 50% decline from the previous month, while total sales dropped by 16%. As expected, the correlation between crypto prices and NFT valuations remains strong, with market sentiment driving fluctuations in trading activity.
Despite the downturn, Pudgy Penguins remained one of the most active NFT collections. While its trading volume declined, sales increased by 25%, indicating strong trading activity at lower price points. Meanwhile, Doodles saw a notable surge in volume, driven by its announcement of a new token, DOOD, set to launch on Solana. This strategic move is part of the project’s broader effort to expand its ecosystem and offer additional value to its community, generating fresh excitement around the collection.
A new trendsetter in the NFT space is Kaito Genesis, an AI-driven collection by Kaito AI, a digital asset search engine designed to democratize crypto information. Launched in December 2024, the collection consists of 1,500 unique NFTs on Ethereum and saw a major surge in February, with its floor price reaching an all-time high of 7.65 ETH. The rally was largely driven by strategic collaborations, including a notable partnership with the Azuki NFT team, aimed at integrating AI capabilities into their ecosystem.
Another standout performer this month is Tokenized Collectibles by Courtyard, an innovative project that bridges physical collectibles and digital assets. Developed by Courtyard.io, the platform enables collectors to tokenize real-world items—such as graded trading cards—by storing them in Brink’s-operated vaults and minting them as NFTs on Polygon. This fusion of tangible and digital assets represents a unique evolution in the NFT space, catering to both traditional collectors and Web3 enthusiasts.
Shifting focus to trader activity, Dobby Fingerprints emerged as the top collection by the number of traders. This project introduces a novel cryptographic approach, allowing NFT holders to claim fingerprint keys within Dobby, the world’s first Loyal AI model. These digital fingerprints enable secure verification of ownership, presenting a new frontier in blockchain-based identity and asset management.
Beyond the broader AI trend dominating Web3, the NFT sector has also seen a growing interest in AI-powered assets. The increasing integration of artificial intelligence into NFT projects signals a shift toward more dynamic, interactive digital assets with enhanced utility.
Alongside AI, sports NFTs have solidified their place as a dominant category. Sorare, a long-standing leader in sports-based NFTs, continues to thrive. However, a new contender, CricSage, has emerged, offering a cricket-based opinion trading platform where users can buy and sell “Yes” or “No” NFTs based on real-world cricket events. This interactive approach to sports NFTs is fueling fresh engagement, particularly within the cricket-loving community.
Analyzing the most traded NFT categories in February provides deeper insight into market trends:
- Profile Picture (PFP) NFTs led in trading volume, generating $243 million across 76,385 sales, with 99% of transactions occurring on Ethereum.
- Gaming NFTs secured the second-highest trading volume at $41 million, with 421,853 assets traded, primarily on ImmutableX (72%).
- Sports NFTs dominated in terms of sheer sales, accounting for 659,097 transactions and $7.7 million in volume, with 98% of activity happening on Starkware.
The evolving landscape suggests that while speculative trading may fluctuate, NFTs with strong utility, engagement, and real-world applications will drive long-term adoption in Web3.
6. A record-breaking month for crypto hacks
February 2025 will go down as the most devastating month in crypto security history, with an unprecedented $1.5 billion stolen from decentralized platforms. This staggering figure marks the largest amount ever lost in a single month due to hacking incidents, underscoring the ongoing vulnerabilities in Web3 security.
The primary driver behind this record-breaking loss was the Bybit exchange hack, in which North Korea’s Lazarus Group exploited a multisig vulnerability to drain approximately $1.4 billion in crypto. This attack has now surpassed the Ronin bridge exploit of 2022, becoming the largest DeFi-related theft to date. The breach has sent shockwaves through the industry, reigniting concerns over multisig security and centralized operational risks within exchanges and DeFi platforms.
Beyond Bybit, several other dapps fell victim to major exploits in February. The zkLend lending protocol suffered losses of $9.5 million due to a mathematical rounding bug, exposing critical flaws in protocol design. Meanwhile, Ionic Money was drained of $8.6 million in a fake token collateral scam, further highlighting the persistent risks associated with DeFi lending platforms.
Interestingly, nearly all of these hacks stemmed from off-chain vulnerabilities rather than on-chain exploits. Attackers leveraged social engineering tactics, compromised user interfaces, and rogue developers to gain unauthorized access, reinforcing the notion that Web3 security extends far beyond smart contract audits. The sheer scale of February’s breaches has sparked renewed calls for comprehensive security measures, with industry leaders urging platforms to prioritize operational security, multisig protections, and enhanced UI safeguards alongside traditional smart contract reviews.
As the Web3 landscape continues to evolve, these incidents serve as a harsh reminder that even the most advanced blockchain ecosystems remain susceptible to sophisticated attacks. Strengthening security protocols, improving governance over private keys, and conducting broader risk assessments will be essential to safeguarding the future of decentralized finance.
7. Closing words
February 2025 showcased the dynamic and often unpredictable nature of the Web3 landscape. While the industry faced challenges—ranging from a downturn in NFT trading to record-breaking security breaches—innovation continued to drive new opportunities. The rise of AI-powered dapps, the resilience of gaming and DeFi ecosystems, and the emergence of alternative blockchain networks highlight the sector’s adaptability and ongoing expansion.
As we move forward, the importance of security, sustainability, and user-driven innovation remains at the forefront. The Web3 space is evolving rapidly, and with every challenge comes a lesson that strengthens the foundations of decentralized technology. Whether through enhanced security measures, more intuitive AI integration, or the continued growth of community-driven projects, the decentralized future is still being written—one block at a time.
