July Dapp Report: Overall Activity Cools Down, DeFi TVL Hits New High, Blockchain Games Show Resilience

Author: Sara Gherghelas, Dappradar

Compiled by: Felix, PANews

July was anything but calm for Web3. Despite a slight decrease in the overall number of active wallet users, dropping to 22 million daily (an 8% decline), the month was still filled with undercurrents. NFT trading volume surged by 96%, with user activity surpassing that of DeFi, a situation not seen in months. Meanwhile, the total value locked in DeFi reached $270 billion, setting a new historical high, while the market capitalization of tokenized stocks skyrocketed by 220%.

But growth is not without risks. Hacker attacks have resulted in losses of $132 million. Although AI remains one of the most promising fields, the usage of most AI dapps has seen a double-digit decline. Regulation is rapidly catching up, with the U.S. having passed several significant cryptocurrency bills, and the global regulatory framework is also beginning to take shape.

From the strong momentum of blue-chip NFTs to record flows of capital in DeFi, this month has proven that Web3 is far from slowing down, just changing lanes.

Key Points:

• In July, there were 22 million independent active wallets interacting with DApps daily, a decrease of 8% compared to the previous month.
• Game applications account for the highest proportion at 22.4%, followed by artificial intelligence (18.7%) and NFTs (17.5%)
• NFT trading volume increased by 96% to $530 million, with the average NFT price doubling to $105.
• The total value locked (TVL) in DeFi reached a new high of $270 billion on July 28, an increase of 30% month-on-month.
• The activity of AI DApps has decreased, but Dmail, XPIN, and ChainGPT are steadily growing.
• In July, losses due to vulnerabilities reached 132 million USD, an increase of 16% compared to June.

1. Dapp Activity Cooling Down

As in previous years, July saw a typical summer slowdown, with the number of daily active unique wallets decreasing by 8%, down to 22 million.

The social sector has seen the largest decline, with daily active users (dUAW) dropping by 27% to 2.8 million. This is not surprising, as social dapps often fluctuate with the waves of speculation. Currently, InfoFi platforms like Farcaster and the new Base dapp have become the focus, but many of these communities still have strict entry barriers. This makes it difficult for new users to participate, despite the huge potential. However, in the long run, this category may become fundamental. The creator economy has already dominated traditional media and is making strong inroads into the Web3 space.

The artificial intelligence sector also saw a significant decline of 14%, with dUAW dropping to 4.1 million. Meanwhile, DeFi shrank by 6%, continuing the recent cooling trend. However, the gaming sector showed resilience, growing by 2%, while NFTs remained stable.

The gaming sector continues to lead the DApp ecosystem, accounting for 22.4% of the market share in July. Following closely are artificial intelligence (18.7%) and NFTs (17.5%). A significant change is that DeFi, which was the dominant sector two months ago, has now fallen behind NFTs. This clearly indicates a shift in user behavior, possibly reflecting changes in users' priorities when interacting with Web3.

2. Web3 most commonly used in dapp

Daily Independent Active Wallet Count (dUAW) Ranking

Solana-based DEX continues to dominate. The memecoin wave is far from over, and these exchanges remain key venues for retail activity.

Outside of DeFi, another noteworthy dapp is "World of Dypians," a game-type dapp that consistently maintains a stable user base and steadily drives an increase in user activity.

It is also worth noting that two AI DApps have made it to the top of the rankings. Their emergence indicates that users' interest in AI-driven Web3 experiences is not just a passing trend, but has become ingrained in their daily activities.

Although DeFi may no longer dominate the overall wallet share, it still leads the DApp rankings. Why? Because launching a DeFi DApp and actually gaining users is no easy task, but those DApps that succeed in breaking through tend to achieve higher levels of activity and loyalty.

In contrast, the variety of DApps in areas such as gaming, social networking, or NFTs is much richer, and users' attention is more fragmented.

3. Artificial Intelligence Dapp: Rise, Fall, and Future

In July, the activity level of most AI DApps decreased, but three projects stood out with steady growth: Dmail Network, XPIN Network, and ChainGPT. These projects, along with others, are worth paying attention to.

• Dmail Network: A blockchain-based encrypted email service.
• Exorde: Utilize AI to gather global news and insights.
• ChainGPT: A set of AI-based crypto tools, including ChainGPT Pad, a launch platform for early-stage projects. (ChainGPT Pad is also part of our DappLaunch program!)

In addition, one of the largest initiatives in this field comes from Lightchain AI, which has launched a mainnet specifically designed for on-chain machine learning. With a virtual machine tailored for AI and a "smart proof" consensus mechanism, it provides a glimpse into the future development direction of decentralized AI infrastructure.

Theta Network has also accelerated its pace by integrating Amazon's Trainium and Inferentia chips to support use cases such as "Quakebot," which is the AI agent for the San Jose Earthquakes of Major League Soccer (MLS).

Protocols like Aethir and Render Network are making decentralized computing a reality. Aethir's compute hours have reached 1 billion hours, and it has launched AI-driven crypto credit cards, while Render has migrated to Solana for faster and more cost-effective performance.

The ASI Alliance, formed by SingularityNET, Fetch.ai, and Ocean Protocol, has officially merged under the $ASI token. It aims to create a fully decentralized AGI stack.

In the gaming sector, Elympics has launched the $ELP token to enable AI-driven "Agentic Gaming" and connect it with NFT intellectual properties such as Pudgy Penguins and Doodles.

AI tokens such as TAO, RNDR, and AGIX have garnered significant attention from investors, with TAO receiving a $10 million investment from TAO Synergies, making it the largest public AI fund to date.

At the same time, researchers unveiled A1, an artificial intelligence agent capable of autonomously exploiting vulnerabilities in smart contracts, indicating that artificial intelligence as both a tool and a risk is rapidly evolving.

In terms of regulation, the United States has passed multiple bills providing clear guidance for participants in the AI and cryptocurrency sectors, and has appointed an AI and cryptocurrency czar, marking an increasing role for AI in the blockchain space.

4. DeFi TVL hits a new high

In July, DeFi performed spectacularly. TVL grew by over 30%, closing the month at $259 billion. Even more noteworthy is that on July 28, DeFi TVL set a historical high of $270 billion, clearly indicating an increase in market confidence, enhanced liquidity, and a growing demand from users for lending, trading, and tokenized assets.

Tokenized stocks have become a major highlight. The number of wallets interacting with these assets surged from about 1,600 to over 90,000, while their total market value increased by 220% during the same period. This is not just growth; it signals that RWA is beginning to reach a critical mass.

Ethereum continues to dominate the DeFi space, with a total locked value of (TVL) reaching 166 billion dollars, far exceeding Solana's 23 billion dollars. In July, the price of ETH surged nearly 60%, likely driven by favorable regulatory news. Meanwhile, the annualized yield for staking rewards soared to 29.4%, reflecting increased market confidence and user participation.

In terms of Solana, Hyperliquid has stood out, generating 35% of the blockchain's revenue in July, thanks to the rise in demand for derivatives. Currently, Hyperliquid handles over 60% of the 24-hour perpetual contract trading volume, with open interest reaching $15.3 billion, and facilitating $5.1 billion in USDC bridging.

In terms of policy, July is a significant moment for cryptocurrency regulation in the United States. Lawmakers have passed:

• The GENIUS Act (——established a framework for stablecoins.
• CLARITY Act )——Clarifies digital asset classification (SEC vs. CFTC).

More importantly, the Chairman of the U.S. Securities and Exchange Commission, Atkins, announced "Project Crypto," outlining a roadmap for the integration of DeFi and traditional finance, which includes proposals for token issuance, custody, and a dedicated compliance framework for DeFi.

( 5. NFT activities surpass DeFi

The NFT market shows strong vitality. In July, NFT activity surpassed DeFi, a change that had not been seen for a period of time. What is the reason behind this momentum?

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The trading volume nearly doubled, increasing by 96% to reach $530 million. However, sales fell by 4% to $5 million. This reflects one thing: the price of NFTs has increased.

In June, the average price of NFTs was $52. In July, this price rose to $105, an increase of 103%. Blue-chip collections have once again become the focus, with whales leading the charge.

Thanks to professional traders and their Blend lending protocol, Blur dominates Ethereum NFT trading volume (with a daily share of up to 80%). OpenSea maintains its user base lead (with an average of about 27,000 users per day) through long-tail asset listings and cross-chain activities. Zora has gained attention with its creator-first L2 network and $ZORA token, offering affordable and convenient NFT minting services.

In addition, Starbucks has ended its Odyssey NFT loyalty pilot program. Nike's SWOOSH continues to release digital products and has partnered with EA Sports to launch virtual sneakers in games. Louis Vuitton, Rolex, and Coca-Cola (China) have initiated NFT pilot projects related to authentication and collectibles. Netflix, NBA Top Shot, FIFA, and others are still involved, but the licensing terms are more defined.

Significant change? NFTs are evolving from speculation to practical tools, transitioning from collectibles and culture to real-world assets of identity, ticketing, gaming, and tokenization.

( 6. Vulnerability leads to $132 million loss

I hope to report a situation where there have been no hacker attacks or exploits within a month, but the current Web3 world is not like that (at least not yet). Moreover, with signs of a market recovery, it seems that criminals are intensifying their attacks.

In July, losses caused by exploitations exceeded $132 million, an increase of 16% compared to June.

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Main vulnerabilities in July 2025:

• CoinDCX ($44 million) - An Indian exchange suffered a server breach, targeting its internal liquidity accounts. Fortunately, user funds were unaffected, and the exchange continues to operate normally.
• GMX v1 ($42 million) — On July 9, a vulnerability was discovered in the GMX v1 version on the Arbitrum platform, allowing malicious contracts to manipulate internal accounts and withdraw funds exceeding the allowable amount. The GLP mining pool was affected; other GMX versions were not impacted. A bounty has been set to recover the funds.
• BigONE ($28 million) — On July 16, the centralized exchange BigONE's hot wallet suffered unauthorized access, resulting in losses across multiple chains. The platform stated that all user assets are safe and will bear the full loss.

These events serve as a warning that security efforts in Web3 are still ongoing. Whether deeply involved in DeFi, NFTs, or AI DApps, be sure to carefully check smart contract permissions, avoid clicking on suspicious links, and use hardware wallets whenever possible.

Related Reading: 2025 Q2 Dapp Market Report: AI Agent Applications Dominating, RWA and Games Driving NFT Revival