State of the Dapp Industry Q2 2025

While crypto prices bounced back and sentiment improved, the dapp ecosystem told a different story: explosive growth in AI agents, NFTs shifting from flex to function, and DeFi caught between rising TVL and shrinking funding. The data didn’t just show activity, it revealed where users are actually going, what’s being left behind, and which trends are redefining the future of dapps.

We’re no longer in the era where hype alone moves the charts. Today, users are seeking real value, whether in the form of AI agents performing useful tasks, NFTs tied to physical assets, or DeFi platforms offering sustainable yields. At the same time, risks remain high, with a sharp rise in losses from exploits reminding us how fragile trust can be and how harsh small mistakes can be abused by those with ill intent.

This report dives into these shifts, analyzing the data across DeFi, NFTs, gaming, AI, and more. From wallet activity and trading volume to dormant dapps and investment flows, we trace the signals that matter,  and spotlight the narratives shaping the second quarter of 2025.

Key Takeaways 

• The dapp industry averaged 24.3 million daily Unique Active Wallets (dUAW) in Q2 2025, a 2.5% decline QoQ, yet still up 247% compared to early 2024
• Gaming remains the most dominant dapp category, accounting for 20.1% of industry activity, but AI is closing the gap fast, having a 18.6% in dominance QoQ.
• DeFi Total Value Locked (TVL) rose to $200 billion, a 28% QoQ increase, driven by ETH’s 36% rebound. However, DeFi funding dropped 50% QoQ, with only $483 million raised in Q2, bringing the 2025 YTD total to $1.4 billion.
• NFT trading volume dropped 45% to $867 million, yet sales soared 78% to 14.9 million, highlighting a sharp drop in average price, with an increase by 20% in the number of traders.
• Real-World Asset (RWA) NFTs grew 29% in volume, securing the #2 category position with Courtyard becoming the second most used NFT marketplace this quarter.
• Guild of Guardians NFTs ranked #1 and #4 in trading volume, overtaking BAYC and CryptoPunks, marking a turning point for gaming NFTs.
• Web3 suffered $6.3 billion in losses from hacks, a 215% increase QoQ. The Mantra exploit alone wiped $5.5B, making it the second-largest event since the FTX collapse back in 2022, with $8B lost.

Table of Contents 

1. The dapp industry holds steady at 24M dUAW as AI and Social gain ground
2. DeFi’s TVL surges to $200B, but funding drops 50% in Q2 2025
3. NFT sales jump 78% as trading volume falls — RWAs and Gaming lead the shift
4. $6.3 billion lost to exploits in Q2 — one of the worst quarters since FTX
5. Closing words

1. The dapp industry holds steady at 24M dUAW as AI and Social gain ground

The dapp industry saw a 2.5% decrease in activity this quarter, averaging 24.3 million daily Unique Active Wallets (dUAW). Still, we could say the ecosystem has consolidated around this threshold, a sign of growing maturity and proof that users are here, actively interacting with dapps across multiple verticals. It’s important to note that many users operate more than one wallet, so there’s a distinction between dUAW and actual user count. However, the metric remains a strong indicator of engagement. Just a few quarters ago, the industry was sitting at around 5 million dUAW, so the evolution is clear.

When breaking it down by sector, DeFi and Gaming both recorded drops in active wallets, with DeFi seeing a 33% decrease and Gaming falling by 17%. On the other hand, Social and AI dapps posted growth, which aligns with broader trends. In Social, the rise of InfoFi is noticeable, with platforms like Kaito and Cookie DAO leading the charge. In AI, agent-based dapps are showing strength, with Virtuals Protocol becoming a standout.

As expected, these sector-level shifts also impacted dominance. The drop in activity for DeFi and Gaming resulted in decreased dominance, while AI and Social gained ground. Comparing Q2 2025 with Q1, it’s evident that AI is rising fast, and Social isn’t far behind. I wouldn’t be surprised if, by the end of the year, AI overtakes either Gaming or DeFi in terms of dominance.

And in fact, looking at the top dapps by UAW this quarter, an AI dapp ranks first.

The rest of the leaderboard is populated by familiar names, mostly from the DeFi sector, which makes sense given their longevity and consistent usage around the memecoin and Agent token hype.

Still, there’s another perspective worth exploring. This quarter, we added a new metric: dormant dapps. Specifically, we looked at dapps that were active in Q1 2025 but showed no activity in Q2.

We focused on the main categories. DeFi saw a 2% increase in inactive dapps, Gaming jumped by 9%, and NFT dapps by 10%. For this analysis, we chose to include High-Risk dapps, which actually showed a 40% decrease in inactivity, meaning these are still being used and rarely abandoned. But the surprising part comes from AI. Inactive AI dapps increased by 129%. The percentage may seem large, but it only represents 16 dapps. Still, it raises important questions. It highlights how early we are in the lifecycle of these projects, especially in Gaming and AI, and how difficult it is to achieve mainstream adoption without enough runway. Retaining users continues to be one of the toughest challenges in Web3, and the data clearly supports this.

2. DeFi’s TVL surges to $200B, but funding drops 50% in Q2 2025

This quarter felt like a rollercoaster at the macroeconomic level, and the DeFi sector wasn’t immune to the turbulence. That said, there are signs of optimism. First, crypto prices showed a strong rebound. Bitcoin rose by 30% compared to Q1 2025, Ethereum climbed by 36%, and the total crypto market cap increased by 25%. Naturally, DeFi followed this positive momentum, with Total Value Locked (TVL) reaching $200 billion, marking a 28% quarter-over-quarter increase.

Looking at the top blockchains by TVL, most chains recorded healthy growth, with Tron being the only one in decline, down by 8%. In terms of dominance, Ethereum remains the undisputed leader, now holding 62% of DeFi’s total TVL, followed by Solana at 10%.

A standout this quarter was Hyperliquid L1, which recorded a 547% increase in TVL. Built for onchain perpetual and spot trading, it’s a high-performance Layer-1 that uses HyperBFT, a consensus model inspired by HotStuff

We also looked at the top DeFi dapps by activity in Q2 2025, offering insights into where user engagement is currently the highest.

For real-time insights, you can always check our DeFi Narrative Page.

Finally, we analyzed the investment flow into DeFi this quarter. A total of $483 million was raised, representing a 50% decline compared to Q1. So far in 2025, DeFi projects have secured around $1.4 billion in funding. While that number shows a slowdown from the explosive growth we’ve seen in past cycles, it still suggests steady interest and perhaps, a more mature capital allocation environment. Let’s see how the rest of the year unfolds, but for now, the trend appears to be stabilizing.

3. NFT sales jump 78% as trading volume falls — RWAs and Gaming lead the shift

We’re all hoping for a revival in the NFT space, and while there’s still general interest, some of the core metrics remain challenging. NFT trading volume dropped by 45% this quarter, yet sales actually increased by 78%. This backs a trend we’ve observed for a while, NFTs are becoming more affordable, but the interest hasn’t disappeared. On the contrary, it’s shifting in nature.

To better understand what’s behind this shift, we looked at the top NFT categories traded this quarter, and the data reveals something interesting: new narratives are emerging, and old ones are making a comeback.

From the visual, we can see that PFPs took a major hit, with a 72% drop in trading volume. On the other hand, Real-World Assets (RWAs) climbed to second place with a 29% increase in volume. The Art category saw a 51% decrease in volume, but a 400% surge in sales suggesting that prices have dropped significantly, making Art NFTs more accessible to a wider audience.

Another returning trend is domain NFTs, with both trading volume and sales on the rise. This growth is largely driven by activity on the TON blockchain, where Telegram users are buying anonymous, number-based domains that can be linked to Telegram accounts without SIM cards, a very specific use case that seems to resonate.

After understanding what categories are trending, we wanted to look at the number of traders, to gauge whether more participants are entering the space or returning to it.

This quarter, we had an average of 668,598 monthly NFT traders, up 20% from the previous quarter. Taken together with the spike in sales, this suggests a slow but steady return of users to the NFT space,  although likely for different motivations than in previous cycles.

To understand where this activity is happening, we turned to NFT marketplaces.

OpenSea remains in the lead, though it recorded a sharp drop in trading volume. Still, its number of sales increased, alongside Courtyard. This uptick on OpenSea is linked to its announcement of the upcoming $SEA token. The airdrop will target both historical users and those currently engaging with the updated marketplace. As a result, many users are now actively trading cheaper collections to farm points in hopes of maximizing their future rewards, a familiar pattern we’ve seen in other airdrop campaigns.

Courtyard, meanwhile, has rapidly climbed to second place. It’s a clear signal that the RWA narrative is gaining momentum, not only on the DeFi side, but also in NFTs. And frankly, it’s a welcome development. Tokenized physical assets may be the catalyst that pushes NFTs toward more mainstream relevance.

We also explored which collections dominated in Q2 2025, and the data shows a surprising shift.

For the first time in a long while, possibly years, a gaming NFT collection topped the charts in quarterly trading volume. Guild of Guardians secured not just one, but two positions in the top five, surpassing blue-chip collections like CryptoPunks and BAYC. This supports what we’re seeing overall: NFT activity in Q2 is largely driven by RWAs and gaming assets. And now, we have the data to back it up.

4. $6.3 billion lost to exploits in Q2 — one of the worst quarters since FTX

We hoped that after all these years, the industry would have learned its lessons to stay vigilant, to be more careful with user funds, and to mature at least to some degree. But unfortunately, this quarter proved otherwise. The Web3 space lost $6.3 billion to hacks and exploits in Q2 2025, a 215% increase from the previous quarter, and one of the highest losses recorded since the FTX collapse.

If there’s any silver lining, and that’s a big if, it’s that 87% of the losses came from a single incident: the Mantra exploit. In some ways, this could be seen as a positive signal: the number of incidents was relatively low at just 31, but the magnitude of that one case skewed the total. That said, it also raises the question, are we really building better, safer products? Or are we just lucky when things don’t break?

Looking closer, here are the top five incidents this quarter:

• Mantra Exploit (April 13, 2025): Mantra’s OM token crashed by over 90%, wiping out $5.5 billion in market cap. This appears to have been a coordinated insider dump, not a technical vulnerability in the smart contracts.

• Private wallet exploit (April 28, 2025): A social engineering attack led to the theft of 3,520 BTC (~$330.7M) from an individual user.

• Cetus Protocol hack (May 22, 2025): The leading DEX on Sui Network was exploited for $260 million, crashing token prices by over 90% and forcing a pause in smart contract activity.

• Nobitex hack (June 18, 2025): Iranian exchange Nobitex lost over $82 million. The attack was claimed by Gonjeshke Darande, a pro-Israel hacktivist group that also threatened to leak the platform’s internal code and data.

• UPCX exploit (April 1, 2025): The attacker gained access to the ProxyAdmin contract, upgraded it, and used admin privileges to drain 18.4M UPC (~$70M) across three management accounts.

There’s honestly not much to say other than this: it’s disheartening. It makes you question how far we’ve really come. But at the same time, we know many projects are actively working on better security infrastructures, audits, and response plans. The best we can do as builders, investors, and users is to stay safe, stay informed, and stay cautious.

Use tools like DappRadar to verify the projects you interact with. It’s not always enough, but it’s a good start.

5. Closing words

As we close Q2 2025, it’s clear the dapp industry is entering a new phase, one marked by both consolidation and transformation. While overall activity held steady around 24 million daily wallets, we’re witnessing a clear shift in user behavior and sector dominance. AI and Social dapps, driven by emerging narratives like InfoFi and agent economies, are gaining ground fast. NFTs are adapting, with RWAs and gaming assets leading the charge, suggesting a shift from speculation to utility.

DeFi remains a core pillar, backed by strong TVL growth and price recovery, even as funding cools. But the surge in exploit-related losses is a stark reminder that growth without robust security can set the space back.

What’s evident is that users haven’t left,  they’re just choosing different experiences. The challenge now is building dapps that are not only engaging, but also secure, sustainable, and truly valuable. We’ll be watching closely, and reporting, as these next chapters unfold.