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