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Decentralized Finance (DeFi) reached a new milestone in Q3 2025, closing the quarter with a total value locked (TVL) of $237 billion.
However, on-chain data tracking daily active wallets shows that retail is exiting the market, as activities have plunged by 22% in Q3.
The “State of the Dapp Industry Q3 2025” report from DappRadar reveals that, despite a decline in user activity, technological development continues to drive the DeFi market to record highs.
According to DappRadar researcher Robert Hoogendoorn, “the rise of stablecoins is really pushing DeFi into the spotlight of traditional finance.”
Stablecoins Push DeFi to $237B TVL – But Where Did The Users Go?
DappRadar analysts observed that of the $237 billion DeFi TVL, Ethereum, which has historically dominated the DeFi sector, commanded over 49% of the entire sector’s value in Q3 2025.
Despite maintaining its leadership position with $119 billion in TVL, Ethereum experienced a 4% decline. Solana retained its second-place ranking but suffered the steepest loss among the top 10 chains.
Solana’s TVL fell 33% to $13.8 billion, largely attributed to waning momentum around Pump.fun and memecoins.
“More encouraging is the performance of other expanding ecosystems, including BNB Chain, Plasma, Base, Tron, Arbitrum, Avalanche, and Hyperliquid,” Robert added.
BNB Chain generated considerable attention with the launch of Aster, a perpetual decentralized exchange (DEX).
Hyperliquid, designed specifically for on-chain perpetual trading, has gained traction throughout the year and has increased its TVL by 29% to $2.85 billion.
A growing pattern has emerged where decentralized exchanges are gradually matching the feature sets of their centralized counterparts.
While DeFi TVL achieved its highest recorded level, the dapp industry witnessed a 22.4% decline in daily unique active wallets.
18.7M Daily Wallets Remain in DeFi: Is Retail Quietly Abandoning Crypto?
During Q3 2025, the industry averaged 18.7 million wallets daily, a decrease from the levels seen in early 2025 through Q2, raising concerns about a potential retail market exit.
Across the entire quarter, every category experienced reduced wallet activity, with Social and AI categories absorbing the heaviest impact.
The AI category lost momentum throughout the quarter, with average active wallets dropping from 4.8 million in Q2 2025 to 3.1 million in Q3 2025.
Virtuals Protocol, the launchpad for AI agents, exemplifies this downward trend. The protocol attracted 10,000 active wallets daily in Q2 2025 while handling millions in transactions.
Currently, it supports between 1,000 and 1,500 active wallets, processing an average daily volume of approximately $100,000.
Alongside AI, the Social category suffered strong losses. Social dapps attracted 3.8 million active wallets daily in Q2, but that figure more than halved to 1.57 million in Q3 2025.
NFTs Surge 158% While AI & Social Collapse
NFTs have gained market share and now hold second place at 18.5%. In the NFT market, trade volume increased throughout 2025.
Q1 data shows 7 million NFTs sold, followed by 12.5 million in Q2. Q3 2025 recorded over 18.1 million NFTs sold, generating $1.6 billion in trading volume.
Between Q2 and Q3, NFT sales surged by 158%. The trading volume spike can be attributed to OpenSea’s campaign for its forthcoming token, designed to reward its most active traders, as well as increased PFP adoption led by CryptoPunks, Moonbirds, BAYC, and Pudgy Penguins.
However, wallet participation increased by only 28.6%, suggesting stronger conviction from existing participants rather than an influx of new users.
$434M Stolen in Q3 as Hackers Exploit Multi-Sig Wallets Despite Record TVL
Despite record DeFi TVL and widespread growth, digital threats from malicious actors persist. During Q3 2025, hackers stole over $434 million worth of cryptocurrency.
The largest attacks involved social engineering and exploits, including a July incident where a hacker exploited a malicious contract on GMX V1 to manipulate internal accounting safeguards, resulting in a $42 million loss.
Days later, CoinDCX suffered a $44 million loss due to a server breach.
Most recently, in September, the social project UXLINK experienced a multi-signature exploit that resulted in $21.7 million in stolen assets.
