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Decentralized AI applications are coming to the throne of Web3: DappRadar
Gaming and decentralized finance have long dominated the DApp ecosystem, but AI is gaining significant momentum to give these sectors a run for their money.
Decentralized AI applications (DApps) have seen an increase in user activity and may soon challenge gaming and DeFi for the top spot in the DApp ecosystem, according to blockchain analytics platform DappRadar.
Gaming and DeFi account for 21% of the market in April, according to the percentage of unique active wallets, while AI rose to 16%, compared to 11% recorded in the February report, according to data from DappRadar's April industry report.
DappRadar analyst Sarah Gergilas said: "As user interest in AI tools across various industries increases, AI-powered decentralized applications are steadily establishing their place in the decentralized ecosystem."
"If this trend continues, AI may soon challenge the traditional dominance of DeFi and Gaming, signaling a new era in the DApp landscape."
Decentralized AI applications have seen an increase in their market dominance this month, while leading companies in the market have slightly declined. Source: DappRadar
AI application activity rose by more than 26% in April to reach 3.8 million daily unique active wallets (dUAW), compared to 2.6 million daily unique active wallets recorded in February.
In contrast, DeFi activity fell by 16%, settling at 4.8 million dUAW, which is equivalent to the gaming sector, which also saw a decline of 10%.
Source: DappRadar
Gergilas noted that most of the decentralized AI applications tracked by DappRadar have remained the same, with many linked to AI agent infrastructure and those building utilities.
LOL, a project that describes itself as an AI-powered mining system, is the top decentralized AI application on DappRadar's dUAW list.
LOL encourages users to send a voice recording of laughter to Telegram groups using the LOL AI bot, which then uses factors like pitch and frequency to calculate how many LOL tokens are paid as rewards.
In second place is the decentralized messaging service Dmail Network, powered by AI. Completing the list is World.Fun, a launch platform that allows users to deploy AI agents in multi-agent simulations.
This month, the top decentralized AI applications on our platform remained largely unchanged, reinforcing the sustainability of early pioneers in the field. These projects not only capitalize on the media hype but also contribute to building utility applications, Gergilas added.
Last December, cryptocurrency industry executives told Cointelegraph that they expect AI agents to transform Web3 by 2025, noting that cryptocurrency storage and on-chain trading are early emerging use cases.
However, there has also been speculation that AI will face headwinds, including technical challenges, regulatory hurdles, and centralization.
Rise of decentralized social media applications as Web3 remains at the forefront
Decentralized social media applications saw a sharp rise in their activity during April, with an 18% increase to reach 3.6 million daily active users. The dominance of decentralized social media applications in the market also grew to exceed 15% over the month.
Related: Cryptocurrency users welcome AI intervention in their investment portfolios: survey
Gergilas stated that "Web3 maintains its position" despite broader market disruptions following comprehensive tariffs imposed by the United States, with 23 million daily active wallets recorded in April, compared to 24 million wallets recorded in February.
She stated: "The strong performance in April underscores a key narrative: that interest and narrative-driven hype, particularly around meme coins and AI, are the main drivers of user engagement."
