DappRadar: DeFi TVL fell 27% in Q1 as AI and social dApps drove web3 growth

The first quarter of 2025 was a turbulent period for web3, with AI and social dApps gaining traction while decentralized finance suffered a sharp decline. The total value locked in DeFi fell 27% to $156 billion, as per DappRadar’s Q1 2025 report . DeFi’s decline was caused by several high-profile security breaches, falling crypto prices, and macroeconomic uncertainty. The biggest blow was Bybit’s $1.4 billion exploit, which the FBI connected to the TraderTraitor group from North Korea. In this exploit, hackers stole about 401,000 Ethereum ( ETH ), converted it to Bitcoin ( BTC ) and other assets, and distributed it among wallets. DeFi’s position was further affected by a 45% decline in ETH over the quarter. Except for Berachain ( BERA ), which grew as a result of its mainnet launch, a token distribution event, and a $142 million funding round, most of the major blockchains saw a drop in DeFi activity. You might also like: AI tokens Bittensor, Render, Grass plunge after key Microsoft news While DeFi struggled, AI-powered dApps thrived, as shown by the 29% increase in daily unique active wallets to 2.6 million. Furthermore, the number of social dApps grew by 10% to 2.8 million dUAW. This shift was largely due to sites like Pump.fun, which made it simpler for users to launch new tokens. Pump.fun saw a 112% rise in activity. NFTs had a weaker quarter as well, with a 24% decline in trading volume to $1.5 billion. The fact that sales only fell 10%, however, points to lower prices rather than a mass exit. PFP collections accounted for the majority of sales, making up 56% of the total NFT volume. In terms of transactions, OpenSea continued to be the most popular marketplace, but OKX had the highest trading volume. Meanwhile, over $2 billion was lost to scams and hacks. Rug pulls like LIBRA and MELANIA resulted in losses of $450 million, but Bybit’s $1.5 billion exploit was by far the largest security breach event. A $50 million hack of the Infini stablecoin platform also exposed underlying security flaws in the industry. Read more: Lazarus Group allegedly makes a profit of $2.51m from selling WBTC