State of the DApp Industry: Insights from Q2 2025

Overview of the DApp Landscape

In the second quarter of 2025, the DApp industry has experienced significant shifts, with AI applications leading the charge, real-world asset (RWA) NFTs redefining value, and DeFi attracting investment yet facing challenges. The staggering $6.3 billion in losses from hacking incidents during this period underscores the vulnerabilities within the sector.

Despite a resurgence in cryptocurrency prices and a more positive market sentiment, the DApp ecosystem tells a different story. The explosive growth of AI agents, the transition of NFTs from luxury items to practical tools, and the complex dynamics of DeFi highlight the evolving preferences of users. This report aims to analyze the current state of the industry, focusing on user behavior, lagging sectors, and emerging trends that are reshaping the future of decentralized applications.

Key Highlights from Q2 2025

• The average number of daily active unique wallets for DApps reached 24.3 million, reflecting a 2.5% decline from the previous quarter but an impressive 247% increase compared to early 2024.
• Total value locked (TVL) in DeFi surged to $200 billion, marking a 28% increase from the previous quarter, largely driven by a 36% rebound in Ethereum prices. However, financing in DeFi dropped by 50%, with only $483 million raised in Q2.
• NFT transaction volume fell by 45% to $867 million, while the number of transactions increased by 78%, indicating a significant drop in average prices but a rise in the number of active traders.
• RWA NFTs saw a 29% increase in transaction volume, with the Courtyard platform emerging as a major player in the market.
• The Guild of Guardians NFT collection achieved remarkable success, surpassing established projects like Bored Ape Yacht Club and CryptoPunks in transaction volume.
• The Web3 sector faced $6.3 billion in losses due to security breaches, a staggering 215% increase from the previous quarter, with the Mantra exploit accounting for a significant portion of these losses.

Daily Active Unique Wallets: Stability Amidst Change

In Q2 2025, the DApp ecosystem recorded an average of 24.3 million daily active unique wallets, a slight decrease of 2.5%. This stability reflects the maturation of the industry and ongoing user engagement across various application categories. Notably, the number of active wallets in DeFi and GameFi saw declines, while Social and AI DApps experienced growth, aligning with broader industry trends.

The rise of InfoFi platforms like Kaito and Cookie DAO in the Social sector and the strong performance of AI-based DApps, particularly Virtuals Protocol, indicate a shift in user interests. The dominance of the AI sector is expected to continue growing, potentially surpassing Gaming or DeFi by year-end.

DeFi: Growth in Locked Value but Declining Financing

The DeFi sector has shown resilience, with total locked value reaching $200 billion, a 28% increase from the previous quarter. This growth is attributed to a rebound in cryptocurrency prices, particularly Ethereum. However, the sector’s financing has taken a hit, with a 50% drop in funds raised compared to Q1, totaling $483 million in Q2.

Despite the slowdown, the overall interest in DeFi remains stable, suggesting a more mature approach to capital allocation. The standout performer this quarter was Hyperliquid L1, which saw its TVL increase by an astonishing 547%.

NFT Market Dynamics: Sales Surge Amid Volume Decline

The NFT market is undergoing a transformation, with transaction volume dropping by 45% while the number of transactions surged by 78%. This shift indicates that NFTs are becoming more accessible, with a growing number of traders entering the space.

RWA NFTs have gained traction, reflecting a shift in market narratives. The resurgence of domain NFTs, particularly within the TON blockchain ecosystem, highlights the evolving interests of users. OpenSea continues to lead the market, bolstered by the anticipation of its upcoming SEA token launch.

Security Concerns: A Stark Reminder of Vulnerabilities

The Web3 sector faced a staggering $6.3 billion in losses due to security incidents in Q2 2025, a 215% increase from the previous quarter. The Mantra exploit alone accounted for $5.5 billion, raising concerns about the industry’s security measures.

While the number of security incidents was relatively low, the severity of a single event inflated the overall losses, prompting questions about the industry’s commitment to building safer products.

Conclusion: A New Phase for DApps

As Q2 2025 concludes, the DApp industry is clearly entering a transformative phase characterized by integration and evolution. While daily active wallet numbers remain stable, user behavior is shifting towards more meaningful engagement with DApps. The rise of AI and social applications, coupled with the growing importance of RWA and gaming assets in the NFT space, signals a move away from speculative hype towards practical value.

Despite the challenges posed by security vulnerabilities, DeFi continues to play a crucial role in the ecosystem. The focus now lies in developing DApps that prioritize safety, sustainability, and genuine value creation. The industry will be closely monitored as it navigates these changes and strives for greater maturity.

Disclaimer: This article is provided for informational purposes only and does not constitute financial advice. Readers are encouraged to conduct their own research before making any investment decisions.