The first quarter of 2025 proved challenging for the Web3 space, with DeFi experiencing a sharp decline while AI and social dApps gained traction.
According to DappRadar’s Q1 2025 report, the total value locked in DeFi dropped by 27%, reaching $156 billion. This decline can be attributed to several prominent security breaches, a dip in cryptocurrency prices, and ongoing macroeconomic instability.
The most significant blow came from Bybit’s $1.4 billion exploit, which the FBI linked to the North Korean-based TraderTraitor group. During this attack, hackers stole approximately 401,000 Ethereum, converted it into Bitcoin and other assets, and dispersed the funds across various wallets. Additionally, DeFi’s performance was further hampered by a 45% drop in ETH during the quarter. While Berachain experienced growth due to its mainnet launch, token distribution event, and a $142 million funding round, most major blockchains saw a decline in DeFi activity.
In contrast to DeFi’s struggles, AI-powered dApps flourished, with daily unique active wallets increasing by 29% to 2.6 million. Social dApps also saw significant growth, rising by 10% to 2.8 million dUAW. This shift was largely driven by platforms like Pump.fun, which streamlined the process of launching new tokens, resulting in a 112% surge in activity.
NFTs, however, faced their own challenges, with trading volume dropping 24% to $1.5 billion. Nevertheless, the 10% decline in sales suggests that lower prices, rather than a mass exodus, were the primary factor. PFP collections remained dominant, comprising 56% of total NFT volume. While OpenSea continued to be the most popular marketplace for transactions, OKX led in trading volume.
This report aligns with a similar one from March, which highlighted a sharp decline in NFT trading since December 2024. While AI-powered dApps have emerged as the fastest-growing sector in Web3, NFT trading volume has seen a 63% drop over the past two months, from $1.36 billion in December to $997 million in January and further down to $498 million in February.
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