February Dapp report: User activity cools down, AI category grows the fastest

Original title:DappRadar's Dapp Industry Report for February 2025

Original author: DappRadar

Original translation: Felix, PANews

In February, the Web3 trend changed, and despite a slight decline in overall activity, AI, gaming and social dapps were still growing. DeFi is facing a sharp decline, with overall NFT trading volume declining despite strong momentum for AI-driven and sports NFTs. The month also set a record of crypto hacking, highlighting the need to strengthen security measures.

Important points

• Dapp activity cooled, with daily independent active wallets (dUAWs) down 8% to 24 million, but users of AI, social and NFTs increased.
• NFT trading volume plummeted 50% to $498 million, reflecting a wider market downturn, but AI-driven and sports-based NFTs are strong.
• DeFi suffered a significant decline, with TVL shrinking from $217 billion to $168 billion, with Ethereum and Solana leading the decline due to capital outflows and liquidity transfers.
• Berachain became the fastest growing DeFi chain with TVL reaching $5.05 billion.
• AI-driven dapp adoption has surged, with some platforms growing at over 700%, cementing AI’s dominance as the fastest growing field in Web3.
• The amount of stolen crypto hackers in February hit a new high of $1.5 billion, mainly due to the invasion of the Bybit exchange ($1.4 billion), the largest attack in history.

Web3 activity declines, but AI , NFT **and social

sectors rise against the trend**

Dapp activity cooled slightly in February after a strong gain in January. It is estimated that the total number of daily independent active wallets (dUAWs) for all tracked dapps has dropped by 8%, stabilizing at around 24 million.

Despite the decline in overall activity, DeFi still dominates with the largest user share. About 27% of active wallets were associated with DeFi applications in February, cementing their position as the most commonly used dapp category. However, not all areas followed a downward trend, with growth in social, NFT and AI indicating changing user interest.

Social dapps grew 9%, with 2.8 million daily independent active wallets (dUAWs) growing 6%, while NFT activity grew 3.5 million users interacting with the NFT platform. Once again, AI became the fastest growing field, soaring 16% and dUAW reached 2.6 million.

From a blockchain perspective, Solana remains the leader in on-chain activity, with the largest number of independent active wallets (UAWs) and transactions. This ongoing engagement reflects the growing appeal of gaming dapps and memecoin’s ongoing launch on the web, making it the center of emerging trends.

Abstract stands out, with UAW (Independent Active Wallet) growing by 1093%.

Popular dapps : Changes in Web3 adoption trends

By analyzing the popular dapps with the largest number of active wallets in February, several key trends can be found, highlighting the ever-evolving landscape of Web3.

Solana and NEAR continue to dominate user activity, maintaining a lead despite a slight fluctuation. Its dapp continues to attract a large number of users, consolidating its position as the preferred platform for developers and users.

Gaming and AI are becoming the most dynamic areas, with adoption rates rising significantly. Gaming dapp LOL's UAW (Independent Active Wallet) grew by 40%, while Alaya AI grew by 72%, highlighting the growing demand for AI-powered Web3 experience and interactive gaming platforms.

In DeFi, user behavior indicates a shift in priority. Uniswap V3 usage has declined, while Uniswap V2 activity has increased, indicating that traders are optimizing the cost efficiency of trading.

At the same time, emerging chains have begun to gain attention, bringing new competition to the dapp industry. For example, Matchain has entered the market strongly, and LOL is in the leading position on this platform.

As Web3 continues to expand, these trends indicate that decentralized applications will be more integrated into daily digital life in the future.

With the rise of new links, DeFi faces market fluctuations

The DeFi sector suffered a sharp decline in February, with TVL plunging from $217 billion to $168 billion. This slip reflects wider market volatility, capital outflows and liquidity changes, which have affected the mainstream and emerging DeFi ecosystems.

The Ethereum network is the backbone of DeFi, with its TVL dropping 27% to $97 billion, but still accounting for more than 57% of total liquidity. The decline is mainly due to the decrease in liquidity of liquidity in liquidity pledge agreements, which have been the main driving force for growth. Despite the market sluggish, Ethereum's position is still unshakable.

Solana lost the most, with its TVL down 33% to $15.4 billion. After a strong January, the decline may be attributed to profit-taking and the migration of liquidity to more stable DeFi. The decline was further exacerbated by the decrease in user activity for protocols such as Jupiter Exchange (10% decline in UAW) and Raydium (39% decline in UAW), indicating a decrease in trading volume and liquidity supply.

Meanwhile, Berachain has become one of the fastest growing DeFi ecosystems, with TVL reaching $5.05 billion. The rise of the chain is due to its liquidity proof model, which attracts users through profitable liquidity staking and earning farming incentives. As users seek high returns amid a general market decline, Berachain positioned itself as a key player in the evolving DeFi landscape.

Other notable trends include BNB Chain and Tron, both playing a key role in stablecoin-based DeFi. BNB Chain’s TVL maintained a relatively modest 11% decline as stablecoin trading and borrowing continue to support liquidity. Tron, however, fell 29%, indicating a decline in demand for USDT trading and a general decline in on-chain stablecoin settlements. In stark contrast to the overall DeFi downturn, Aptos stood out, with its TVL growing by 6% to $1.83 billion.

Fastest growing areas: AI dapp surges

February is an important milestone for AI-powered dapps, as participation surges in multiple fields strengthens the growing synergy between AI and blockchain technology. Users are increasingly exploring social, gaming and DeFi applications that integrate AI, driving a significant increase in adoption. The surge in independent active wallets (UAWs) of AI-powered dapps, with some platforms growing by more than 700% in a month, demonstrating that AI’s influence in the decentralized sector is accelerating.

Among the outstanding applications, LOL became the most used AI dapp, attracting 5.1 million UAWs, a 40% increase thanks to its AI-powered interactive social capabilities on Matchain. Meanwhile, Evermoon and UneMeta achieved +988% and +551% growth, respectively, highlighting the growing demand for AI-powered gaming and NFT platforms. Art and creative tools generated by AI are also becoming more and more popular, with Fractal Visions growing at 721%, demonstrating the increasing popularity of AI-generated NFTs.

The role of AI in financial and social applications is also expanding. Balance uses AI to optimize financial decision-making and community interaction, with its user base growing by 116% in February. Although some platforms have seen declines, such as Dmail Network (-22%) and MomoAI (-40%), the overall AI field remains the fastest-growing category in Web3.

The market downturn caused the NFT market to be hit, but

AI and sports series shine

The downturn in the crypto market has affected the NFT sector. Although NFT has shown signs of recovery in recent months, its momentum has slowed since the beginning of this year. In February, total NFT trading volume fell to $498 million, down 50% from the previous month. As expected, the correlation between cryptocurrency prices and NFT valuations remains strong, with market sentiment causing fluctuations in trading activity.

Despite the market downturn, Pudgy Penguins is one of the most active NFT series. Although its trading volumes fell, the number of transactions increased by 25%, indicating that trading activity was strong at lower prices. Meanwhile, Doodles' trading volume has increased significantly, thanks to its announcement that it will launch a new token on Solana.

The new leader in the NFT field is Kaito Genesis, an AI family powered by Kaito AI, a digital asset search engine designed to democratize encrypted information. Launched in December 2024, the series consists of 1,500 unique NFTs on Ethereum and rose sharply in February, with floor prices reaching an all-time high of 7.65 ETH. The rise was driven primarily by strategic collaborations, including with the Azuki NFT team, aiming to integrate AI capabilities into their ecosystem.

Another outstanding project this month is Courtyard’s Tokenized Collectibles, an innovative project connecting physical collectibles and digital assets. Developed by Courtyard.io, the platform allows collectors to tokenize real-world items by storing them in a vault operated by Brink and minting them as NFTs on Polygon. This convergence of tangible and digital assets represents a unique development in the NFT field, catering to the needs of traditional collectors and also meeting the needs of Web3 enthusiasts.

In addition to the broader AI trend that dominates Web3, AI is increasingly integrated into NFT projects, marking a shift to more dynamic, interactive, and practical digital assets.

In addition to AI, sports NFTs have also consolidated their position as the dominant category. Sorare is a long-time leader in the sports NFT field and continues to thrive. However, new competitor CricSage offers a cricket-based opinion trading platform. This interaction with sports-based NFTs is inspiring new engagement, especially in cricket-loving communities.

Analyzing the largest NFT categories in February to gain a deeper understanding of market trends:

• Profile Picture (PFP​​) NFTs lead in trading volume, generating $243 million in 76,385 transactions, of which 99% occur on Ethereum.
• The gaming NFT ranked second in trading volume at $41 million, with 421,853 assets traded, mainly on ImmutableX (72%).
• Sports NFTs achieved a total of 659,097 transactions and $7.7 million in transaction volume, with 98% of the activity occurring on Starkware.

The changing situation shows that while speculative trading may fluctuate, NFTs with strong practicality, engagement and real-world applications will drive long-term adoption of Web3.

Crypto hacker attacks record month

February was the most destructive month in crypto security history, with decentralized platforms stolen $1.5 billion. This figure highlights the persistent vulnerabilities in Web3 security.

The main reason for the record loss was the hacking of Bybit exchanges, where North Korea's Lazarus Group hacker group used multiple signature vulnerabilities to steal about $1.4 billion in cryptocurrency. The attack has now surpassed the Ronin Bridge vulnerability in 2022, becoming the largest DeFi-related theft to date. The vulnerability has brought an impact on the entire industry, re-raising concerns about the security of multiple signatures and centralized operational risks within exchanges and DeFi platforms.

In addition to Bybit, several other dapps became victims of the vulnerability in February. The zkLend lending protocol lost $9.5 million due to mathematical errors, exposing key flaws in the protocol design. Meanwhile, Ionic Money was stolen $8.6 million in a fake token collateral scam, further highlighting the ongoing risks associated with the DeFi lending platform.

Interestingly, almost all of these hacking attacks originate from off-chain vulnerabilities, not on-chain vulnerabilities. The attacker uses social engineering strategies, compromised user interfaces and malicious developers to gain unauthorized access, further proof that Web3 security is far beyond the scope of smart contract audits. The massive attack in February once again sparked calls for comprehensive security measures, urging platforms to prioritize operational security, multi-signature protection and enhanced UI protection beyond traditional smart contract audits.

As the Web3 landscape continues to evolve, these events warn that even the most advanced blockchain ecosystems are vulnerable to complex attacks. Strengthening security protocols, improving private key governance and conducting broader risk assessments are crucial to safeguarding the future of decentralized finance.

Conclusion

February showed dynamic and unpredictable properties of the Web3 landscape. While the industry faces challenges (from downturns in NFT transactions to security breaches), innovation continues to bring new opportunities. The rise of AI-powered dapps, the resilience of gaming and DeFi ecosystems, and the emergence of new chains highlight the industry's adaptability and continued expansion.

As we move forward, security, sustainability and user-driven innovation remain critical. The Web3 field is rapidly evolving, and each challenge brings a lesson to strengthen the foundation of decentralized technology. Whether it is through enhanced security measures, more intuitive AI integration, or the continued growth of community-driven projects, the future of decentralization is still written in blocks after block.