2025 Q2 Dapp Market Report
AI agents dominate the market, RWA redefines NFT value, DeFi attracts capital but loses momentum, and the $6.3 billion hacker attack in Q2 exposed the industry's vulnerabilities.
Despite the rebound in cryptocurrency market prices and improved sentiment, the DApp ecosystem presents a different picture: AI agents are experiencing explosive growth, NFT values are shifting from ostentation to functionality, and DeFi is navigating through the squeeze of rising TVL and shrinking funding. These data not only showcase market activity levels but also reveal the true flow of users, the areas falling behind, and the key trends reshaping the future of DApps.
In the current era, the phenomenon of market movements being driven solely by hype is no longer present. Users are beginning to pursue real value: whether it's AI agents that can accomplish tasks, NFTs associated with RWA, or DeFi platforms that provide sustainable returns. However, the risks remain high: losses from exploitation incidents have surged sharply, illustrating how fragile trust is, and even minor oversights can be exploited by malicious actors.
This report provides an in-depth analysis of the changes in the industry landscape, comprehensively analyzing data dynamics in areas such as DeFi, NFTs, gaming, and AI. From wallet activity and trading volume to application and capital flows, we track key signals and closely observe the core narratives shaping the crypto industry in Q2 2025.
Key Takeaways:
In Q2 2025, the average number of daily active unique wallets for DApps was 24.3 million, a 2.5% decrease compared to the previous quarter, but still a staggering 247% increase compared to the beginning of 2024.
The total locked value in DeFi reached $200 billion, a quarterly increase of 28%, benefiting primarily from a 36% rebound in Ethereum. However, the funding in the DeFi sector dropped by 50% quarter-on-quarter, with only $483 million raised in Q2, resulting in a total funding of $1.4 billion for the first two quarters of 2025.
NFT trading volume plummeted by 45% to $867 million, but sales volume surged by 78% to 14.9 million transactions, reflecting a sharp drop in market average prices while the number of traders increased by 20%.
RWA NFT trading volume grew by 29%, rising to second place in the rankings, with the Courtyard platform becoming the second largest NFT market by trading volume this quarter.
Guild of Guardians NFT trading volume soared to first and fourth places, surpassing BAYC and CryptoPunks, marking a turning point for gaming NFTs.
Web3 suffered losses of $6.3 billion due to security incidents, increasing by 215%. The Mantra exploitation incident alone accounted for a staggering loss of $5.5 billion, making it the second largest security event in the crypto industry since the FTX bankruptcy (which resulted in an $8 billion loss).
1. The number of daily active unique wallets for Dapps remains stable at 24 million, with significant gains in AI and social sectors.
This quarter, Dapp activity decreased by 2.5%, with an average of 24.3 million daily active unique wallets. Nevertheless, we can still consider that the ecosystem has stabilized at this level, which is both a sign of the industry's increasing maturity and proof that users are continuously interacting with Dapps across multiple application domains. It's 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 basis for measuring user engagement. Just a few quarters ago, the number of daily active unique wallets was around 5 million, showing a significant rate of growth.
Both DeFi and GameFi saw a decline in the number of active wallets, with DeFi down 33% and GameFi down 17%. On the other hand, the Social and AI Dapps achieved growth, which aligns with broader industry trends.
In the Social sector, 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 shifts at the sector level have also affected the distribution of dominance. The decline in activity in the DeFi and Gaming sectors has resulted in a reduction in their market share, while the AI and Social sectors have seized and expanded their share. Comparing Q2 2025 with Q1, we can clearly see the rapid rise of the AI sector, with the Social sector following closely behind. I believe that by the end of this year, it would not be surprising if AI surpasses either Gaming or DeFi in terms of dominance.
In fact, observing the Dapps with the highest number of unique wallets this quarter, an AI Dapp 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 frenzy and Agent token craze, such distribution is understandable.
Additionally, another noteworthy perspective is that we have introduced the 'Dormant Dapp' metric this quarter, specifically tracking decentralized applications that were active in Q1 2025 but completely ceased activity in Q2.
We focused our analysis on several major categories: inactive decentralized applications in the DeFi sector increased by 2%, gaming grew by 9%, and NFT applications rose by 10%. This analysis specifically included high-risk applications, whose inactivity actually dropped significantly by 40%, indicating that they are still in continuous use and rarely abandoned. But most surprisingly, in the field of artificial intelligence, inactive AI applications surged by 129%. Although this percentage seems astonishing, it 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. Without sufficient financial support, achieving mainstream application is extremely difficult. In the Web3 space, user retention remains the most severe challenge, and this data undoubtedly confirms that.
2. The total locked value in DeFi soared to $200 billion in Q2 2025, but funding plummeted by 50%.
This quarter's macroeconomics has been like a roller coaster, and the DeFi sector has not been able to remain unaffected amidst this turmoil.
Nevertheless, the market still shows positive signals: first, the cryptocurrency market price has rebounded strongly, with Bitcoin rising 30% compared to Q1 2025, Ethereum climbing 36%, and the total cryptocurrency market capitalization increasing by 25%. Naturally, the DeFi sector followed this upward momentum, with total locked value breaking 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 downward trend with a decline of 8%. In terms of market share, Ethereum still holds an absolute advantage, occupying 62% of the total TVL in the DeFi sector, followed by Solana with a share of 10%.
The most notable this quarter is Hyperliquid L1, whose TVL surged by 547%. This high-performance Layer 1 blockchain is designed for on-chain perpetual contracts and spot trading, utilizing a HyperBFT consensus model inspired by HotStuff.
We also researched the most active DeFi decentralized applications in Q2 2025, deeply analyzing the current areas with the highest 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 around $1.4 billion in funding. Although this figure indicates a slowdown compared to the explosive growth seen in previous cycles, it still shows stable interest in the sector and may suggest a more mature direction for capital allocation. Let's see how trends unfold for the remainder of this year, but for now, it appears that the trend is stabilizing.
3. NFT sales volume surged by 78%, while trading volume declined: RWA and gaming lead the market shift.
We all hope that the NFT market will see a revival. While overall attention remains, some core data is still not optimistic. This quarter, NFT trading volume plummeted by 45%, but trading volume saw a contrary growth of 78%. This confirms the long-term trend we have observed: NFTs are becoming more affordable, yet market enthusiasm has not waned; rather, it has shifted in nature.
To better understand the reasons behind this shift, we have summarized the highest trading volume NFT categories for this quarter, revealing an interesting phenomenon: new narratives are emerging while old narrative patterns are making a comeback.
Data indicates that trading volume for personal avatar NFTs has plummeted, dropping by 72%. In contrast, real-world asset (RWA) NFTs have jumped to second place in the trading volume rankings with a 29% increase. Trading volume for art NFTs decreased by 51%, but the transaction volume skyrocketed by 400%, indicating that the prices of artworks have significantly dropped, making art NFTs more accessible to average buyers.
A recently returning trend is domain NFTs, which have seen both trading volume and sales rise. This growth is primarily driven by the TON public chain ecosystem, with Telegram users eagerly purchasing number-based anonymous domains. Such domains can be associated with Telegram accounts without needing to bind a SIM card, and this highly tailored use case has clearly sparked market enthusiasm.
After understanding which categories are trending, we began to focus on the number of traders to determine whether market participants are continuing to grow or are returning.
This quarter, the average number of monthly NFT traders reached 668,598, a 20% increase from the previous quarter. Coupled with the phenomenon of soaring sales, this indicates that users are slowly but steadily returning to the NFT space, even though their motivations may differ from those during past booms.
Despite a significant decline in trading volume, OpenSea still maintains its leading position. However, its sales volume has risen in tandem with the Courtyard platform. This spike in OpenSea's growth is closely related to news of its upcoming SEA token launch. This airdrop will target both old users and current active users on the updated version of the platform. As a result, many users are actively trading low-priced NFT collectibles to earn points, attempting to maximize future reward returns, a classic move seen in other airdrop activities.
At the same time, the Courtyard platform has rapidly climbed to the second position in the industry. This clearly indicates that the RWA narrative is not only continuing to heat up in the DeFi sector but is also gaining momentum in the NFT space. Frankly speaking, this development is delightful. The tokenization process of physical assets is likely to become a key catalyst in pushing NFTs into the mainstream spotlight.
We also investigated which product lines dominated in Q2 2025, and the data revealed an unexpected shift.
After a considerable period (possibly several years), a gaming NFT collection has finally topped the quarterly trading volume rankings. Guild of Guardians not only made it into the top five but occupied two spots, surpassing blue-chip projects like CryptoPunks and Bored Ape Yacht Club. This confirms the overall trend we have observed: the NFT market activity in the second quarter has been primarily driven by RWA and gaming assets. Now, we finally have data to support this conclusion.
4. The second quarter saw losses of $6.3 billion due to vulnerability attacks, making it one of the worst quarters since the FTX collapse.
We had hoped that after so many years, the entire industry would have learned lessons and remained vigilant, treating user funds more cautiously and achieving at least a certain degree of maturity. Unfortunately, the reality of this quarter is quite the opposite. In Q2 2025, the Web3 sector lost $6.3 billion due to hacker attacks and security vulnerabilities, a 215% increase compared to the previous quarter, marking one of the most severe loss records since the FTX collapse.
If there is any glimmer of hope, albeit extremely faint, it is that 87% of the losses came from a single incident: the Mantra crash. From some perspectives, this may be a positive signal: there were only 31 security incidents throughout the year, which is not many; rather, the severity of a single case inflated the overall losses. That said, it raises the question: are we truly building safer and more reliable products, or are we merely relying on luck to avoid disaster?
To be specific, the top five events of this quarter are as follows:
Mantra insider selling incident (April 13, 2025): The price of Mantra's token OM plummeted by over 90%, resulting in a market cap evaporation of $5.5 billion. This incident was confirmed to be caused by coordinated selling by insiders, rather than technical vulnerabilities in the smart contract.
Individual user private key theft incident (April 28, 2025): Due to a social engineering attack, a personal user's cryptocurrency wallet was stolen of 3,520 Bitcoins (approximately $330.7 million).
Cetus Protocol hack incident (May 22, 2025): The mainstream DEX of the Sui ecosystem was attacked, resulting in a theft of $260 million, leading to a drop of over 90% in the platform's token price, and the smart contract activity was forced to pause.
Nobitex exchange hack incident (June 18, 2025): The Iranian cryptocurrency exchange Nobitex was attacked by hackers, resulting in losses of over $82 million. The pro-Israel hacker group Gonjeshke Darande claimed responsibility for the attack and threatened to leak the platform's internal code and user data.
Regarding the UPCX protocol vulnerability incident that occurred on April 1, 2025: Attackers exploited the ProxyAdmin smart contract, implemented illegal upgrades, and abused administrator privileges to empty three management accounts in three transactions, stealing a total of 18.4 million UPC (approximately $70 million).
This is indeed frustrating. It makes you question how much progress we have truly made. But at the same time, we know that many projects are actively advancing more robust security infrastructure, audits, and emergency response plans.
As developers, investors, and users, the most we can do is to pay attention to security, stay informed, and act cautiously.
Use tools like DappRadar to verify the projects you interact with. While this is not always foolproof, it's a good starting point.
5. Conclusion
As the second quarter of 2025 comes to a close, DApps are clearly entering a new stage, marked by integration and transformation. Although overall activity (measured by daily active wallet numbers) has stabilized at around 24 million, we are witnessing a clear shift in user behavior and industry dominance. Driven by emerging narratives such as InfoFi and AI agent economy, AI and social Dapps are accelerating their rise. The NFT space is also undergoing transformation, with RWA and gaming assets taking center stage, indicating a directional shift from speculative hype to practical value.
Even as capital cools, DeFi still maintains its core pillar status through strong total locked value growth and price recovery. However, the surge in losses from exploits has sent a clear warning to the industry: the development boom lacking reliable security measures may hinder its progress.
It is evident that users have not left this space; they have simply chosen different ways to experience it. The current challenge lies in creating Dapps that are not only attractive but also ensure safety, sustainability, and the creation of real value. We will closely monitor these future developments and continue to provide in-depth reports.
This article is a collaborative reprint from: Crypto City.
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