The top narratives this year includes the volatile memecoin sector, RWAs, stablecoins and privacy coins.
Decentralized finance plus artificial intelligence (DeFAI) and decentralized science (DeSci) narratives have emerged at the bottom of major crypto sector performance rankings for the year.
Crypto natives have endured a topsy-turvy year where many of the promising narratives that got all the hyped ended up leading the group of worst performers, as the only strong performers this year came from the memecoin, privacy, or RWA sectors.
According to analysts who reviewed the data, the DeFAI narrative is currently down 97% while the DeSci narrative is down 91% alongside categories like GameFi (-85%), Modular blockchains (-92%), and Layer 2s (-81%).
According to Web3 analytics platforms, Dexu.ai, the three narratives are also performing poorly in the mindshare category, with DeFAI holding 0.2%, and 0.1% for DeFAI. The mindshare metric tracks how both narratives were being actively discussed. It covers trends across social media, in this case X (formerly Twitter).
DeFAI started out as the next big thing in crypto. The underlying projects promised autonomy was coming to the on-chain world, and that it would optimize everything from yields to trading.
The projects that emerged raised millions and saw soaring valuations based on visions of AI as a bridge between tradfi and the blockchain. DeSCI followed the same trope; it was hailed as a no-brainer solution to the issues facing the scientific research community.
It promised to decentralize funding, facilitate data sharing, and enable transparent, crowd-funded breakthroughs in fields such as biotech and genomics. Many investors fell for the shiny dream, and the beginning of the year saw projects under the narratives pumping massively. There was real-world utility after all.
Unfortunately, as the year continued, reality set in. There were macro headwinds to consider, saturation triggered by low-quality launches and grifters, as well as regulatory scrutiny.
Also, since the marriage of tradfi and crypto began, execution-oriented themes have taken center stage. People now seem to care more about privacy, high performance, RWAs, and crypto applications like stablecoins and CBDCs.
On X, users commenting on the comparison of the narratives that emerged this year and how they are now performing agreed that the year has been brutal. However, they also implied that all the carnage has been necessary to weed out speculative narratives that have nothing to offer the ecosystem in the long run.
There is no doubt that there has been a purge in the ecosystem this year, but not all narratives fall in the DeFAI and DeSci category. There were sectors that delivered well and rewarded investors who were aligned with macro-resilient themes or execution-focused narratives.
The top narratives that dominated mindshare on Dexu.ai have been L1s, followed by the tokenless protocols and stablecoins. Curiously, even though it barely got any action this year, NFTs are still ranked high, even beating prediction market narratives and the memecoin narrative.
Experts have linked this to major NFT projects getting rebranded as luxury assets or digital identities. Of course, that is only where mindshare is concerned. Where overall YTD growth is concerned, NFTs have performed worse, while memecoins, despite all their bad rep, did better.
Memecoins dominated narratives for most of the year, but the RWA sector has emerged as the undisputed leader of all narratives with +178% returns YTD, as investors rotated into tokens backed by real‑world cash flows and tokenized assets.
Stablecoins and privacy coins also went up in adoption and posted positive gains, but not as much as RWAs.
L1s enjoyed positive growth too, with high-performance L1s like BNB and Hyperliquid helping to increase overall L1 weighting.
Unfortunately, chains like Solana, Aptos, and Sui increased the negative weighting as they were affected by broader market pressure.
Other narratives that managed positive performance include infrastructure narratives, CEXs, and core DeFi protocols. Experts claim these did well because they are tied to clear fundamentals like real‑world collateral and yield, heavy network usage, fee revenue, deep trading activity, and recurring demand from swaps, lending, and liquid staking.
These stats confirm the market has chosen this year’s winners, and most of those overhyped new narratives did not make the cut. As one prominent analyst claimed, this is just the market rewarding the real builders rather than the storytellers.
