Author: Marie Poteriaieva Source: cointelegraph Translation: Shan Ouba, Golden Finance
Key Points
Web3 Daily Active Users: Remain at 24 million in the second quarter of 2025, but the composition of each track is changing.
DeFi: Ranked first with 240 million transactions per week, but Ethereum gas consumption is now mainly accounted for by RWA, DePIN, and AI.
Outperforming Assets: Smart contract platform tokens, yield-generating DeFi, and RWA tokens outperformed the market; AI and DePIN lagged despite strong narratives.
Altcoins are more than just speculative assets alongside Bitcoin. In most cases, they represent, or attempt to represent, specific areas of activity within the Web3 ecosystem, which is seen as a decentralized alternative to the traditional internet and its services.
Assessing the altcoin market's current state and potential requires more than just price. Metrics like gas consumption, transaction volume, and unique active wallets (UAWs) measure activity and adoption, while token price performance reveals whether the market is following on-chain trends. AI and social DApps are gaining widespread adoption. UAWs (unique active wallets) count the number of unique addresses interacting with a DApp and provide a measure of user adoption (although this can be overestimated due to multiple wallets or automated operations). DappRadar's Q2 2025 report shows that daily wallet activity has stabilized at approximately 24 million. However, sector dominance is shifting. Crypto games remain the largest category, holding over 20% of the market share, but this has declined compared to Q1. DeFi has also declined, from over 26% to less than 19%. In contrast, social and AI-related DApps are gaining momentum. Farcaster leads the social space, with approximately 40,000 daily active UAWs. In the AI sector, agent-based protocols like Virtuals Protocol (VIRTUAL $1.18) are performing well, attracting approximately 1,900 UAWs per week. UAWs dominate the DApp industry. Source: DappRadar
DeFi Attracts “Big Players”
Transaction counts indicate how frequently smart contracts are triggered, but are vulnerable to bots and automation.
DeFi’s transaction footprint is somewhat contradictory. While its user base has declined, it still generates over 240 million transactions per week—more than any other Web3 category. Exchange-related activity (which may overlap with DeFi) further solidifies DeFi’s dominance, with crypto games accounting for 100 million transactions per week and the “Other” category (which excludes social but includes AI) accounting for 57 million transactions. DApp transaction volume by category. Source: DappRadar. Total value locked (TVL) is even more telling. According to DefiLlama, DeFi TVL has reached $137 billion, up 150% since January 2024, but still below its peak of $177 billion at the end of 2021. The discrepancy between rising TVL and declining UAW reflects a key theme of this cryptocurrency cycle: institutionalization. Capital is concentrating in fewer, larger wallets, and now also funds. This trend remains nascent due to the regulatory uncertainty faced by DeFi in many jurisdictions. Nevertheless, institutions are testing the waters by providing liquidity to permissioned pools and lending through tokenized treasuries on platforms like Ondo Finance and Maple (SYROP), the latter known for its partnership with investment bank Cantor Fitzgerald. Meanwhile, as DeFi evolves into a capital-efficient layer for large-scale yield generation rather than retail participation, protocol-level automation offered by DeFi services like Lido (LIDO) or EigenLayer is further dampening wallet activity. Other use cases are dominating Ethereum's gas consumption. Transaction data alone doesn't paint a complete picture of Web3; Ethereum's gas usage reveals the true distribution of the economy and computational load. Data from Glassnode shows that although DeFi has always been a core sector of Ethereum, its gas consumption now accounts for only 11%; NFTs, which once accounted for a considerable share in 2022, have now dropped to 4%. In contrast, the "other" category has soared from about 25% in 2022 to over 58% today. This category covers real-world asset tokenization (RWA), decentralized physical infrastructure (DePIN), AI-driven DApps, and other more or less novel services, all of which have the potential to define the next phase of Web3 growth. Ethereum Gas Usage by Category. Source: Glassnode. RWAs, in particular, are often considered one of the most promising sectors in crypto. Excluding stablecoins, their total size has jumped from $15.8 billion at the beginning of 2024 to $25.4 billion today, involving approximately 346,000 token holders. Will Prices Follow the Web3 Narrative? Asset prices rarely keep pace with on-chain activity. While hype can drive price spikes in the short term, sustained growth often aligns with sectors demonstrating real utility and adoption. Over the past year, infrastructure and yield-oriented projects have significantly outperformed sectors driven solely by narratives. Smart contract platform tokens saw the strongest gains, with the top ten averaging a 142% increase, led by HBAR, which saw a 360% surge, and XLM, which saw a 334% increase. As the foundational building blocks of Web3, the price growth of these tokens demonstrates investor confidence in the long-term development of the sector. DeFi tokens also performed well, averaging a 77% year-over-year increase, with Curve DAO (CRV) up 308% and Pendle (PENDLE) up 110%. The top ten RWA tokens saw an average gain of 65%, primarily driven by XDC (+237%) and OUSG (+137%). Highlights in the DeFi sector, such as JasmyCoin (+72%) and Aethir (+39%), still saw average gains hovering around 10%. AI tokens lagged significantly behind: the top ten pure AI projects saw a 25% year-over-year decline, with Bittensor (TAO) alone posting a 34% gain. Gaming tokens mostly declined, with SuperVerse (SUPER) surging 750% over the past 12 months. Social tokens remain virtually absent from the crypto landscape, with major protocols still lacking native assets. Overall, Web3 investment remains concentrated in mature sectors, driving up the native currencies of major smart contract platforms. Yield-oriented DeFi and RWA tokens also delivered impressive returns. In contrast, the most hyped narratives—AI, DeFi, and social—have yet to translate this buzz into tangible token returns.
As adoption deepens and more sectors mature, the gap between narrative and performance may gradually narrow. But for now, investor confidence remains firmly rooted in the foundation of the decentralized economy.