Q2 2025 DApp Market Report: Rise of AI Applications, RWA and Gaming Drive NFT Revival

The significant growth of AI applications, the redefinition of NFT value with RWA, the growth of DeFi but a decline in financing, and massive losses caused by security incidents are all key features of the DApp market in the second quarter of 2025.

Despite the rebound in cryptocurrency prices and improved market sentiment, the DApp ecosystem presents a complex situation: AI applications are experiencing explosive growth, the value of NFTs is shifting from ostentation to functionality, while DeFi is progressing amidst rising TVL and shrinking funding. These data not only reflect market activity but also reveal user flows, lagging sectors, and key trends that are shaping the future of DApps.

The current market can no longer rely solely on speculation to drive trends. Users are beginning to pursue real value: AI applications that can perform tasks, NFTs linked to physical assets, and DeFi platforms that provide sustainable returns. However, at the same time, risks remain high: losses due to security vulnerabilities are sharply rising, indicating that the industry is still fragile, and even minor oversights can be maliciously exploited.

This report provides an in-depth analysis of changes in the industry landscape, comprehensively examining data dynamics in areas such as DeFi, NFT, gaming, and AI. From wallet activity, transaction volume to applications and capital flows, we track key signals and focus on observing the core narratives shaping the cryptocurrency industry in the second quarter of 2025.

Main findings:

• In the second quarter of 2025, the average number of daily active unique wallets for DApps was 24.3 million, a decrease of 2.5% compared to the previous quarter, but still a growth of 247% compared to the beginning of 2024.
• The total locked value in DeFi reached $200 billion, with a quarter-on-quarter increase of 28%, mainly benefiting from Ethereum's 36% rise. However, the financing amount in the DeFi sector decreased by 50% quarter-on-quarter, with only $483 million raised in the second quarter, and a total financing amount of $1.4 billion in the first two quarters of 2025.
• The NFT trading volume decreased by 45% to $867 million, but the number of transactions increased by 78% to 14.9 million, reflecting a significant drop in the market average price, while the number of traders grew by 20%.
• RWA NFT trading volume increased by 29%, rising to second place, with the Courtyard platform becoming the second largest NFT market by trading volume this quarter.
• The trading volume of Guild of Guardians NFT has surged to first and fourth place, surpassing BAYC and CryptoPunks, marking a turning point for game-related NFTs.
• Web3 suffered a loss of $6.3 billion due to security incidents, an increase of 215% compared to the previous period. The Mantra incident alone resulted in a loss of as much as $5.5 billion, making it the second largest security incident in the crypto industry since the FTX bankruptcy case in 2022 (which incurred a loss of $8 billion).

1. The number of daily active independent wallets for DApps remains stable at 24 million, with significant growth in the AI and social fields.

This quarter, the activity level of DApps decreased by 2.5%, with an average of 24.3 million daily active unique wallets. Nevertheless, the ecosystem appears to have stabilized at this level, which is both a sign of the industry's increasing maturity and indicates that users are continuously interacting with DApps across multiple domains. It is worth noting that many users operate multiple wallets, so there is a discrepancy between the number of daily active unique wallets and the actual number of users. However, this metric remains a strong indicator of user engagement. Just a few quarters ago, the number of daily active unique wallets was around 5 million, and its growth rate is quite evident.

The number of active wallets in DeFi and GameFi has both decreased, with DeFi dropping by 33% and GameFi by 17%. On the other hand, Social and AI DApps have seen growth, which aligns with broader industry trends.

In the Social domain, the rise of InfoFi is noteworthy, with platforms like Kaito and Cookie DAO leading the way. In the AI sector, agent-based DApps are showing strong momentum, with Virtuals Protocol standing out.

As expected, these changes at the sector level have also affected the distribution of dominance. The decrease in activity in the DeFi and Gaming sectors has led to a reduction in their market share, while the AI and Social sectors have captured and expanded more share. Comparing the second quarter of 2025 to the first quarter, it is evident that the AI sector is experiencing rapid growth, with the Social sector following closely behind. By the end of this year, it would not be surprising if AI surpasses either Gaming or DeFi in dominance.

In fact, observing the DApps with the highest number of independent wallets this quarter, there is an AI DApp that ranks first.

The remaining spots on this list are occupied by many well-known projects, primarily from the DeFi sector. Given that these projects have maintained long-term stable operations amid the Meme coin craze and Agent token frenzy, such a distribution is also understandable.

In addition, another perspective worth noting is: this quarter we have added the "Dormant DApp" metric, which specifically tracks decentralized applications that were active in the first quarter of 2025 but completely ceased activity in the second quarter.

We focus on analyzing several main categories: the number of inactive decentralized applications in the DeFi sector increased by 2%, games grew by 9%, and NFT applications rose by 10%. This analysis particularly includes high-risk applications, whose inactivity actually decreased significantly by 40%, indicating that they are still in use and rarely abandoned. However, the most surprising finding is in the artificial intelligence sector, where inactive AI applications surged by 129%. Although this percentage seems astonishing, it actually corresponds to only 16 applications. Nevertheless, this phenomenon raises important considerations: it highlights that these projects (especially in gaming and AI) are still in their early stages of development, and without sufficient funding support, achieving mainstream adoption is exceedingly challenging. In the Web3 space, user retention remains the most daunting challenge, and this data undoubtedly corroborates that.

2. The total value locked in DeFi soared to $200 billion in Q2 2025, but financing fell by 50%.

This quarter's macroeconomy has been fluctuating like a roller coaster, and the DeFi sector has not been able to remain unscathed in this turmoil. Nevertheless, the market still shows positive signs: first, the cryptocurrency market prices have rebounded strongly, with Bitcoin rising 30% compared to the first quarter of 2025, Ethereum climbing 36%, and the total market capitalization of cryptocurrencies growing by 25% quarter-on-quarter. Naturally, the DeFi sector follows this upward trend, with the total value locked surpassing the $200 billion mark, achieving a 28% quarter-on-quarter increase.

Observing the total locked value performance of major blockchains, most chains recorded steady growth, while Tron showed a declining trend with a drop of 8%. In terms of market share, Ethereum still holds a dominant position in the DeFi space with an absolute advantage, accounting for 62% of the total TVL, followed by a certain platform with a share of 10%.

The standout this quarter is Hyperliquid L1, whose TVL skyrocketed by 547%. This high-performance Layer 1 blockchain is designed for on-chain perpetual contracts and spot trading, utilizing the HyperBFT consensus model inspired by HotStuff.

We also researched the most active DeFi decentralized applications in the second quarter of 2025, delving into the areas with the highest current user participation.

Ultimately, we analyzed the investments flowing into the DeFi sector this quarter. The sector raised a total of $483 million, a decrease of 50% compared to the first quarter. So far in 2025, DeFi projects have secured approximately $1.4 billion in funding. Although this figure indicates a slowdown compared to the explosive growth we have seen in previous cycles, it still demonstrates a stable interest in the sector from capital, which may also indicate a more mature direction for capital allocation. Let's see how the trend develops for the rest of this year, but for now, it seems that the trend is stabilizing.

3. NFT sales surged by 78%, while transaction volume declined: RWA and gaming lead market transformation

We all expect the NFT market to recover. Although overall attention remains, some core data is still not optimistic. This quarter, NFT trading volume plummeted by 45%, but the transaction volume increased by 78% against the trend. This confirms the trend we have observed over the long term: NFTs are becoming increasingly affordable, but the market enthusiasm has not faded; instead, it has shifted in nature.

To better understand the reasons behind this transition, we have organized the highest trading volume NFT categories for this quarter, and the data reveals an interesting phenomenon: new narratives are emerging, while old narrative patterns are making a comeback.

Data shows that the trading volume of personal avatar NFTs has been severely impacted, plummeting by 72%. In contrast, real-world asset (RWA) NFTs have jumped to second place in the trading volume rankings with a 29% increase. The trading volume of art NFTs has decreased by 51%, but the transaction volume has surged by 400%, indicating that the prices of artworks have dropped significantly, making art NFTs more accessible to average buyers.

The recent trend in return is domain NFTs, with both transaction volume and sales soaring. This growth is mainly driven by the TON public chain ecosystem, as Telegram users are rushing to purchase anonymous domain names based on digital numbers. Such domain names can be linked to Telegram accounts without binding a SIM card, and this very fitting use case for specific needs has clearly sparked market enthusiasm.

After understanding which categories are becoming trends, we begin to focus on the number of traders to determine whether market participants are continuously growing or returning.

In this quarter, the average monthly NFT traders reached 668,598, an increase of 20% compared to the previous quarter. Combined with the surge in sales, this indicates that users are slowly and steadily returning to the NFT space, although their motivations may differ from those during past booms.

Despite a significant decline in trading volume, a certain trading platform still maintains its leading position. However, its sales volume has surged in sync with the Courtyard platform. This wave of growth for the platform is closely related to the news of its upcoming token launch. This airdrop will target both old users and those currently active on the updated version of the platform. As a result, many users are actively trading low-priced NFT collectibles to accumulate points, trying to maximize future reward earnings, which is a classic move often seen in other airdrop activities.

At the same time, the Courtyard platform has rapidly risen to the second position in the industry. This clearly indicates that the narrative of RWA is not only gaining momentum in the DeFi space but is also stirring up waves in the NFT sector. Frankly speaking, this development trend is encouraging. The代