Author: DappRadar; Compiler: Felix, PANews
May 2025 is a turning point for the Dapp (decentralized application) industry. With rising user activity, DeFi's strong return, and the consolidation of AI's position in Web3, the ecosystem is showing signs of stability and maturity. From market recovery to infrastructure upgrades and shifting user preferences, May highlights how Dapps continue to evolve in terms of long-term utility, not just in hype cycles.
Daily active unique wallets (dUAW) reached 25 million in May, an increase of 8%, indicating a healthy development trend for the entire ecosystem.
DeFi total value locked (TVL) grew 25% to $200 billion, driven by a 40% rise in Ethereum prices and $244 billion in trading volume on Hyperliquid.
NFT trading volume grew 40% to $280 million, with a 35% increase in transactions, driven primarily by Ethereum, Abstract, and Telegram-related domains.
AI dapps saw 4.8 million daily active user wallets (dUAW), up 23%, rivaling DeFi and gaming in terms of user engagement.
$275 million lost to Web3 vulnerabilities - the third-worst month in a year, exceeding the combined total of November to March.
In May, dapps showed clear signs of optimistic recovery, with dUAW increasing by 8% to 25 million. This growth is in line with the overall market sentiment and benefited from the recovery of DeFi and NFT activities, which will be discussed in the following sections.
Three areas performed outstandingly this month, with sustained and significant growth:
AI DApp increased by 23%, dUAW reached 4.8 million
Social DApp increased by 21%, dUAW reached 4.3 million
NFT DApp Growth 9%, dUAW reached 3.9 million
These growths not only indicate that the appeal of each field is increasing, but also promote the development of a more balanced ecosystem. We are witnessing the gradual dominance of AI, DeFi and game DApps, and their respective shares in user activity are relatively close.
In addition to the increase in user activity in the fields of AI, DeFi and games, another emerging trend worth paying attention to is "InfoFi" - the financialization of data and information in the field of Web3. While AI continues to attract mainstream attention, InfoFi is quietly building a new layer of the decentralized stack. This trend enables users, protocols, and AI agents to buy, sell, stake, lend, or borrow data, insights, and models, often leveraging blockchain technology for provenance, transparency, and monetization. Just as SocialFi is redefining user engagement, InfoFi is building the infrastructure for data to become an active financial asset.
The diversification of user engagement marks an important milestone. A healthy and mature dapp ecosystem means that multiple verticals can thrive simultaneously, which is reflected not only in hype cycles, but also in continued utility, community adoption, and platform evolution.
While AI has always been a mainstream topic across industries, on-chain data is now confirming the hype. With AI dapps on par with DeFi and games in terms of daily active wallets, AI is being integrated into blockchain experiences, from productivity tools and agents to social and marketing tools.
May on-chain activity shows a stronger and more diverse DApp ecosystem. With user attention more evenly distributed across sectors and further integration of emerging technologies such as AI, the Web3 landscape is evolving towards a stronger and more sustainable infrastructure.
User engagement patterns in May show a gradual shift from speculative craze to more utility-oriented DApps. While the memecoin craze led by platforms such as Pump.fun in April attracted a lot of attention, the momentum seems to be cooling. As of May, Pump.fun has declined from its peak activity, suggesting that memecoin trading may have reached a saturation point, at least for now.
In contrast, DeFi DApp's independent active wallets (UAW) increased significantly, especially on Uniswap V2, which continued to benefit from strong activity on Base. On May 4, Uniswap announced its integration with Soneium, which was a major development. This move not only enriched Uniswap's L2 presence, but also opened a new chapter in integrating DeFi with entertainment and consumer technology.
In the gaming space, World of Dypians continues to dominate, consistently ranking among the top in terms of monthly active users. Its immersive world-building and loyal community of players are becoming key factors in attracting players in the long term, in a category that often faces the problem of players' interest not lasting.
Meanwhile, in the AI & Social space, SubHub has gained momentum by combining personalized Web3 communications with AI-enhanced delivery infrastructure. Positioned at the intersection of messaging, wallets, and smart location, SubHub is emblematic of how AI dapps are beginning to build a loyal user base, rather than just chasing hype cycles.
The performance of popular DApps in May reflects a broader trend: while speculative hype can quickly drive user surges, long-term retention increasingly relies on practicality and platform innovation. Whether it’s AI-based communications, underlying game interactions, or L2-based DeFi expansion, the DApps that are rising in the rankings today offer users not only speculation, but also ease of use and functionality.
DeFi continued its upward trend in May, with TVL growing 25%, bringing the total size of the industry to approximately $200 billion. The recovery is closely tied to the overall market rally, especially Bitcoin’s record high and Ethereum’s 40% price surge, both of which have significantly boosted the valuation and liquidity depth of DeFi assets.
TVL has grown across all major DeFi ecosystems, indicating renewed investor confidence and more active on-chain activity. Among them, one project stands out.
The outstanding performance this month was the decentralized exchange Hyperliquid, with a trading volume of US$244 billion, accounting for about 10% of Binance's market share. With this performance, Hyperliquid ranks as follows:
Top 5 centralized and decentralized exchanges by trading volume
Top 10 total locked value across all blockchain networks
This marks a major shift in the way on-chain derivatives protocols are competing directly with major centralized finance (CeFi) players, and indicates that decentralized perpetual contracts and derivatives are maturing.
In addition to the various indicators, there were several important updates and policy initiatives in May that affected the development of DeFi:
Ethereum's Pectra upgrade
This highly anticipated hard fork brought two key improvements:
EIP-7702: Introducing account abstraction to provide smart contract-like features to ordinary wallets, including batching and gas fee sponsorship.
EIP-7251: Raising the validator reward cap from 32 ETH to 2048 ETH, allowing institutional stakers to obtain compound staking rewards and improve funding efficiency.
XRP Ledger Launches EURØP Stablecoin
Ripple has launched EURØP, a stablecoin pegged to the euro that is fully compliant with the EU's Markets in Crypto-Assets Regulation (MiCA). This makes it the first major stablecoin to comply with MiCA regulations, marking a new stage in DeFi regulatory compliance.
US GENIUS Act Makes Progress
The U.S. Senate passed a motion to end debate on the bipartisan GENIUS Act, which aims to promote federal regulation of stablecoin issuers, by a vote of 66 to 32. The progress of the bill ended a long and lengthy debate, indicating that regulatory momentum is growing in Washington.
South Korea Considers Approving Cryptocurrency ETFs
South Korea’s ruling party has pledged to approve cryptocurrency spot ETFs and ease bank restrictions on exchanges, a move that could significantly increase the accessibility of cryptocurrencies to Asia’s highly active retail markets.
As DeFi’s foundations are rebuilt, protocol-level upgrades, regulatory clarity, and market growth suggest a more mature and resilient future for DeFi. While risks remain, performance in May 2025 proves that DeFi is growing in both infrastructure and institutional relevance.
AI continues to dominate globally, and its impact on Web3 is becoming increasingly significant. As industries race to incorporate AI into their operations, AI-powered dapps are steadily gaining ground in the decentralized ecosystem. As such, this is not just hype, but a trend that reflects society’s shift toward open, user-autonomous technology.
The best-performing AI dapps this month have remained generally stable, highlighting the strong staying power of early market leaders.
The most notable newcomer on the list is SubHub, an AI-enhanced Web3 notification and marketing platform developed by Dmail. It aims to optimize how projects interact with their audiences, enabling personalized messaging through wallet addresses and decentralized identifiers (DIDs). Positioned at the intersection of AI, communications, and social DApps, SubHub reflects the growing demand for autonomous, targeted, and decentralized promotion methods as users grow tired of traditional centralized marketing models.
SubHub's combination of smart messaging and wallet-based targeting capabilities also reinforces the idea of the growing convergence of social and AI DApps, enabling user-centric experiences at multiple levels of Web3 infrastructure.
In addition to DApps, this month has also seen significant progress in the AI x blockchain space:
ThinkAgents.ai released the open source "Think Agent Standard", a protocol for deploying autonomous agents in decentralized networks, a step towards interoperable on-chain AI.
Tether announced its foray into AI, with plans to launch a decentralized AI platform that combines peer-to-peer communications with crypto-native integrations.
Assisterr (Solana) raised $2.8 million at a $75 million valuation to support code-free deployment of small language models (SLMs) — providing composable AI tools without the heavy development costs.
Donut Labs received $7 million in seed funding to build the first “proxy” Web3 browser, combining AI capabilities with crypto wallets and DEXs.
Global exchange BingX pledged $300 million over three years in its “AI Evolution” roadmap — integrating AI into its trading engine and ecosystem.
Perhaps most telling, however, is the growing public sentiment in favor of decentralized AI. A Harris Poll (May 29) commissioned by Digital Currency Group shows that:
77% of Americans believe that decentralized AI is more beneficial to society than centralized models.
56% prefer AI development through decentralized systems.
These data highlight a cultural shift that aligns with Web3’s values of transparency, user ownership, and antitrust.
In May, the NFT market showed signs of recovery, with transaction volume climbing to $280 million, a 40% increase from the previous month. Similarly, the number of NFT transactions increased by 35% to 2.7 million. Although this growth brings a glimmer of optimism, it is far from a full recovery. It will take several consecutive months of growth to form a sustainable trend, but small victories are still victories.
Ethereum's NFT transaction volume increased by 30%, regaining its dominance, accounting for 53% of the total NFT market. Immutable zkEVM followed closely behind, accounting for 13%, and Abstract accounted for 10%. Notably, Abstract's transaction volume soared 1,200%, mainly due to speculative activities related to mining and expected airdrops, indicating that incentive mechanisms are still affecting the NFT market. This can be seen in the fact that the most popular NFT series has more than 1 million daily transactions, but the floor price is still around $300.
By sector, the strongest growth is art-based NFTs, with series like Good Vibes Club driving a significant increase in trading volume. Close behind is the resurgence of domain name NFTs, especially those related to TON and Telegram, as Telegram-based dapps continue to gain popularity. Their appeal lies in easy access, gamification experience, and low entry barriers, which suggests that the combination of messaging platforms and NFTs may become a long-term trend.
Several developments in May are expected to reshape the NFT landscape:
Apple cancels 30% NFT tax on iOS
Under legal pressure, Apple took a landmark move to cancel the 30% fee for NFT transactions within iOS apps, reducing barriers to NFT markets integrated into iOS apps and opening the door to wider use of NFT platforms on mobile devices.
OpenSea Launches OS 2.0
OpenSea has launched OS2, an overhauled multi-chain marketplace that expands beyond NFTs to fungible tokens and memecoins, supports 19 blockchains, and integrates minting, redemption, and trading into a unified experience.
FIFA Migrates NFT Platform to EVM
FIFA has announced that it will migrate its NFT platform from Algorand to a custom Ethereum-compatible chain, the so-called FIFA Blockchain, a move that will improve scalability and wallet compatibility for fan collectibles, and support operations through MetaMask and other EVM tools.
Tokenization of physical assets is gaining traction
Courtyard, a platform for tokenizing physical assets, has become one of the largest NFT collection platforms with a trading volume of over $55 million, indicating a growing demand for RWA-based NFTs.
Although enthusiasm for the NFT space is gradually returning, most of the volume is still driven by airdrops, mining incentives, and speculation. If this momentum holds in the coming months, it could herald a new phase for NFTs—one that combines practicality, accessibility, and real-world applications.
Although the number of individual incidents in May was less than that in April, the losses caused by hacker attacks and vulnerability exploits are still deeply worrying. According to the REKT database, only 7 incidents caused more than 275 million US dollars in losses, making it the third most expensive month in the past year, exceeding the sum of November, December, January and March.
Although this figure is a sharp drop of 95% from the record losses in April, largely due to the Mantra DAO incident, it is misleading to regard this as a sign of recovery. The severity of the single attack in May highlights the persistent systemic vulnerabilities in the dapp ecosystem.
Highlights of this month:
Cetus Protocol Vulnerability: $260 million
On May 22, Cetus Protocol, a decentralized exchange on the Sui network, suffered a large-scale attack that resulted in a loss of $260 million. The price of tokens on the platform plummeted, with some tokens losing more than 90% of their value, and the team immediately suspended smart contract operations to control losses and investigate.
Cork Protocol Vulnerability: ~$12 million
On May 28, the Cork Protocol suffered a smart contract vulnerability that resulted in the theft of 3,760 wstETH worth approximately $12 million. The attack exposed critical flaws in the contract logic and immediately triggered community alerts.
Mobius Token (MBU) Incident: ~$2.16M
On May 11, a suspicious interaction with an unverified contract on Binance Smart Chain resulted in a loss of $2.16M. While the incident looked like a typical exploit, there were signs that it was likely a “rug pull,” further blurring the line between technical vulnerabilities and malicious behavior.
The data from May clearly shows that despite improvements in tooling and awareness, the Web3 space remains highly vulnerable. The continued presence of multi-million dollar attacks urgently calls for stricter auditing standards, real-time risk monitoring, and better education for developers and users.
May was a critical month for the dapp ecosystem, marking a full recovery and maturation of industry dynamics. Daily active wallets hit 25 million, with user engagement trending upward, driven by growth in key verticals like DeFi, NFTs, AI, and social.
The shift from hype-driven activity to utility-focused engagement is becoming clearer. While memecoins may have cooled, decentralized finance protocols like Hyperliquid and AI dapps like SubHub are gaining prominence, showing that users are gravitating toward platforms that offer functionality, innovation, and real value.
DeFi TVL grew 25%, reflecting a return of confidence, driven by infrastructure upgrades and policy advances. Meanwhile, NFT volumes surged 40%, Ethereum regained dominance, and RWAs also gained traction. AI continues to gain momentum, both in terms of public sentiment (77% of Americans prefer decentralized AI) and in usage, matching the user activity of games and DeFi.
In short, the DApp industry is moving from a turbulent experimental phase to a solid foundation for development. With the diversification of user activities and the practical application of technologies such as AI, the ecosystem is entering a new phase - a phase defined not only by trends, but also by infrastructure, balance, and long-term resilience.
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