DeFi TVL Drops in Q1 2025 as AI and Social Apps Gain Momentum

The DeFi sector faced a turbulent start to 2025, with the total value locked (TVL) dropping to $156 billion by the end of the first quarter.

A combination of economic instability and the aftermath of a major crypto exchange hack significantly impacted the sector, according to data from DappRadar.

The decrease in TVL amounted to a 27% decline from the previous quarter, driven primarily by the lingering effects of the Bybit exploit and broader economic concerns. Ethereum, the largest blockchain by TVL, saw a sharp 37% fall to $96 billion, while Sui recorded the most substantial drop among the top 10 blockchains, plummeting 44% to $2 billion.

Solana, Tron, and Arbitrum also saw their TVLs reduced by more than 30%. In contrast, Berachain, a recent entrant to the top 10, gained $5.17 billion in TVL within just two months, defying the downward trend.

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Despite DeFi’s challenges, blockchain projects focusing on AI and social applications witnessed a surge in user engagement. Daily active wallets interacting with AI protocols grew by 29%, while social apps saw a 10% increase. DappRadar pointed out that AI agent protocols are becoming increasingly prominent, marking a shift from mere concepts to real user adoption.

On the other hand, the NFT sector struggled, with trading volumes dropping 25% to $1.5 billion. OKX’s marketplace took the lead in sales, followed by OpenSea and Blur. Pudgy Penguins emerged as the most popular collection, while CryptoPunks maintained their reputation despite fluctuating prices, generating over $63 million from fewer than 500 transactions.

The crypto market, still absorbing the fallout from economic factors and hacks, continues to reflect a complex and evolving landscape.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.