Q2 2025 Decentralized Application Market Report: Rapid Development of Artificial Intelligence Applications, Real Assets and Games Drive Revival in the NFT Sector

AI agent applications are rapidly rising, real assets are redefining NFT value, DeFi is attracting funds but its momentum is gradually weakening, and the $63 billion in hacking losses in the second quarter have exposed the industry's vulnerabilities.

Despite the rebound in cryptocurrency market prices and improved sentiment, the decentralized application ecosystem presents a different picture: AI agent applications have seen explosive growth, the value of NFTs has shifted from ostentatiousness to functionality, and DeFi is moving forward amidst the contradiction of rising total locked value and shrinking financing. These data not only showcase market activity but also reveal the real user trends, areas of development lag, and key trends that are reshaping the future of decentralized applications.

In the current era, the phenomenon of relying solely on hype to drive market trends is no longer present. Users are beginning to pursue true value: whether it's AI agents that can complete tasks, NFTs associated with real assets, or DeFi platforms that provide sustainable returns. However, at the same time, risks remain high: losses caused by exploitation incidents are surging sharply, demonstrating how fragile trust is, and even minor oversights can be exploited by malicious actors.

This report delves into the changes in the industry landscape, providing a comprehensive analysis of data dynamics in the fields of DeFi, NFT, gaming, AI, and more. From wallet activity and trading volume to application and capital flow, we track key signals and focus on observing the core narratives shaping the cryptocurrency industry in the second quarter of 2025.

Key Points:

• In the second quarter of 2025, the average daily active independent wallets for decentralized applications was 24.3 million, a month-on-month decrease of 2.5%, but still up 247% compared to the beginning of 2024.
• The total value locked in DeFi reached $200 billion, with a quarter-on-quarter growth of 28%, mainly benefiting from a 36% rebound in Ethereum. However, the financing amount in the DeFi sector declined by 50% quarter-on-quarter, with only $483 million raised in the second quarter, bringing the total financing amount for the first two quarters of 2025 to $1.4 billion.
• NFT trading volume plummeted by 45% to $867 million, but the number of sales surged by 78% to 14.9 million, reflecting a sharp decline in average market prices, while the number of traders increased by 20%.
• The trading volume of real asset NFTs increased by 29%, rising to the second position in the track, with the Courtyard platform becoming the second largest NFT market in terms of trading volume this quarter.
• The trading volume of Guild of Guardians NFT has soared to first and fourth place, surpassing BAYC and CryptoPunks, marking a pivotal moment for game-related NFTs.
• Web3 has incurred losses of $6.3 billion due to security incidents, an increase of 215% compared to the previous period. The Mantra exploit case alone resulted in losses of $5.5 billion, making it the second largest security incident in the crypto industry since the FTX bankruptcy case in 2022 (with losses of $8 billion).

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

The activity level of decentralized applications declined by 2.5% this quarter, 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 decentralized applications across multiple application fields. 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 basis for measuring user engagement. Just a few quarters ago, the number of daily active unique wallets was around 5 million, and its growth rate is very evident.

The number of active wallets in DeFi and GameFi has declined, with DeFi down 33% and GameFi down 17%. On the other hand, Social and AI decentralized applications 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 field, agent-based decentralized applications 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 decline in activity in the DeFi and Gaming sectors has led to a decrease 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 rise of the AI sector is rapid, while the Social sector is closely following. By the end of this year, it would not be surprising if AI surpasses either Gaming or DeFi in dominance.

In fact, observing the rankings of independent wallets for this quarter, there is an artificial intelligence application that ranks at the top among decentralized applications.

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

In addition, another perspective worth noting is that this quarter we have added the "Dormant Decentralization Application" metric, specifically tracking those 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 specifically includes high-risk applications, which saw a significant decrease in inactivity of 40%, indicating that they are still in use and rarely abandoned. However, the most surprising was 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 achieving mainstream adoption is incredibly difficult without adequate financial support. In the Web3 space, user retention remains the most daunting challenge, and this data undoubtedly confirms that.

2. The total locked value of DeFi soared to $200 billion in the second quarter of 2025, but financing dropped by 50%.

This quarter's macroeconomics has been like a roller coaster, and the DeFi sector has not been able to remain unscathed amidst this turmoil. Nevertheless, the market still shows positive signals: firstly, the cryptocurrency market has made a strong rebound, with Bitcoin up 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 has followed 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 various 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 maintains its leading position in the DeFi space with an absolute advantage, occupying 62% of the total TVL, followed by Solana with a share of 10%.

The most impressive this quarter is Hyperliquid L1, with its TVL skyrocketing 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 the second quarter of 2025, deeply analyzing the fields with the highest current user participation.

Finally, we analyzed the investments flowing into the DeFi sector this quarter. The sector raised a total of $483 million, a decline of 50% compared to the first quarter. So far in 2025, DeFi projects have secured around $1.4 billion in funding. While this figure indicates a slowdown in explosive growth compared to the previous cycles we have seen, it still shows a stable interest in the sector from funds, and may also suggest a more mature direction in capital allocation. Let's see how the trends unfold for the rest of the year, but for now, it seems that the trend is stabilizing.

3. NFT sales surge by 78%, but transaction volume declines: Real assets and games lead market shift

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

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

The data shows that the trading volume of personal avatar NFTs has taken a heavy hit, 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 art pieces have dropped significantly, making art NFTs more accessible to average buyers.

Recently, the trend of domain NFTs has returned, with both trading volume and sales rising sharply. 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 the need for a SIM card, and this use case, which perfectly meets specific needs, has clearly sparked market enthusiasm.

After understanding which categories are trending, we start to pay attention to the number of traders to determine whether market participants are continuously increasing or returning.

In this quarter, the average number of NFT traders reached 668,598, an increase of 20% compared to the previous quarter. Combined with the phenomenon of skyrocketing 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 drop in trading volume, a certain trading platform still maintains a leading position. However, its sales volume has risen in sync with the Courtyard platform.