Crypto's Two-Speed Economy: DApp Users Plunge, DeFi Hits $237B TVL

DApps lost 22.4% of their daily active users in Q3 2025, averaging 18.7 million unique wallets, while DeFi total value locked (TVL) surged to a record $237 billion, driven by stablecoin inflows, regulatory clarity, and institutional capital. The divergence highlights a two-speed dynamic in the crypto ecosystem, where user engagement in mainstream DApps declines but financial flows into DeFi infrastructure intensify. Stablecoins, led by Tether (USDT) and USD Coin (USDC), injected $46 billion into DeFi, acting as a bridge between traditional finance and crypto.

The decline in DApp activity was most pronounced in SocialFi and AI categories, which saw user bases halve. SocialFi wallets fell from 3.8 million to 1.5 million, while AI-focused DApps lost 1.7 million users, dropping from 4.8 million to 3.1 million daily active wallets. Gaming, which retained 25% of DApp market share, also showed signs of stagnation, with engagement driven more by incentives than organic participation. Virtuals Protocol, an AI-driven platform, exemplified the trend, reducing its daily active wallets from 10,000 to 1,000–1,500.

DeFi's growth, however, was underpinned by structural factors. The U.S. GENIUS Act provided legal clarity for stablecoins, boosting institutional confidence and accelerating capital inflows. New infrastructure, such as Plasma-a blockchain dedicated to stablecoins-added $8 billion in TVL within its first month. Ethereum maintained its dominance with $119 billion in TVL, though BNB Chain gained 15% growth, partly due to the launch of perpetual DEX Aster. Meanwhile, Solana's DeFi TVL contracted 33% to $13.8 billion, reflecting waning momentum around Pump.fun and memecoins.

NFTs showed mixed signals. While trading volumes dropped by 50% in February 2025 to $498 million, the sector evolved toward utility-driven assets. Platforms like Courtyard tokenized physical collectibles, generating $145 million in Q3 volume from 1.55 million units sold. Innovations such as PunkStrategy, a decentralized protocol automating CryptoPunks trades, integrated DeFi mechanics into NFTs, blending speculation with financial optimization. OpenSea's airdrop campaigns also revived micro-transaction activity, though most sales targeted existing users.

Security concerns persisted despite DeFi's growth. Q3 2025 saw $434 million in crypto thefts, including a $42 million exploit on GMX V1 and a $21.7 million multi-sig breach at UXLINK. Analysts attributed vulnerabilities to off-chain weaknesses, such as flawed interfaces and social engineering, rather than smart contract flaws. The Bybit hack in February 2025, which resulted in a $1.5 billion loss, underscored the need for stronger private key management and authentication protocols.

The industry's trajectory suggests a shift toward utility and infrastructure over speculative growth. DappRadar's August 2025 report noted that gaming and NFTs exhibited greater resilience than social or speculative categories, with infrastructure improvements like interoperability tools and gas abstraction solutions reducing onboarding friction. While DeFi's TVL growth outpaced user activity, the sector's capital intensity reinforced its role as a cornerstone of the web3 financial stack.

Source: [1] DappRadar Q3 2025 Report (https://www.cointribune.com/en/dapps-lose-22-of-users-but-defi-attracts-capital/)

[2] DappRadar Industry Report August 2025 (https://gam3s.gg/news/dappradar-report-for-august-2025/)

[3] DappRadar Official Report (https://thecoinomist.com/news/february-dapps-decline-whats-happening-in-the-industry/)

[6] DappRadar Q3 2025 TVL Analysis (https://cointelegraph.com/news/defi-tvl-record-237b-dapp-wallets-drop-22-q3-2025)

[7] DappRadar Security Report Q3 2025 (https://cryptonews.com/news/defi-tvl-hits-record-237b-as-daily-active-wallets-plunge-22-in-q3-retail-exit/)