May 2025 marked a turning point for the decentralized application (DApp) industry. With rising user activity, a strong comeback for DeFi, and AI cementing its role in Web3, the ecosystem demonstrated signs of stability and maturity. From market recovery to infrastructure upgrades and shifting user preferences, May highlighted how DApps are evolving toward long-term utility rather than hype cycles.

Key Takeaways:

• Daily Unique Active Wallets (dUAW) reached 25 million, up 8%, signaling robust ecosystem health.

• DeFi Total Value Locked (TVL) grew 25% to $200 billion, fueled by Ethereum’s 40% price surge and Hyperliquid’s $244 billion trading volume.

• NFT trading volume rose 40% to $280 million, with transactions up 35%, driven by Ethereum, Abstract, and Telegram-linked domains.

• AI DApps hit 4.8 million dUAW, a 23% increase, rivaling DeFi and gaming in user engagement.

• Web3 exploits led to $275 million in losses—the third-worst month in a year, surpassing the combined totals from November to March.

May showcased clear signs of optimistic recovery for DApps, with dUAW climbing 8% to 25 million. This growth aligned with broader market sentiment and was supported by resurgent DeFi and NFT activity, explored in later sections.

Three sectors stood out this month with sustained, significant growth:

• AI DApps: +23% (4.8M dUAW)

• Social DApps: +21% (4.3M dUAW)

• NFT DApps: +9% (3.9M dUAW)

This growth not only reflects rising sector appeal but also fosters a more balanced ecosystem. AI, DeFi, and gaming DApps now dominate, with nearly equal shares of user activity.

Beyond rising engagement in these areas, an emerging trend is "InfoFi"—the financialization of data and information in Web3. While AI captures mainstream attention, InfoFi is quietly building a new layer of the decentralized stack. This trend enables users, protocols, and AI agents to trade, stake, lend, or borrow data, insights, and models, leveraging blockchain for traceability, transparency, and monetization. Much like SocialFi redefined engagement, InfoFi is laying the groundwork for data as an active financial asset.

Diversified user engagement marks a key milestone. A healthy DApp ecosystem means multiple verticals thrive simultaneously—not just during hype cycles but through sustained utility, community adoption, and platform evolution.

Though AI dominates industry discourse, on-chain data now confirms its momentum. With AI DApps rivaling DeFi and gaming in daily active wallets, AI is integrating into blockchain experiences—from productivity tools and agents to social and marketing applications.

May’s on-chain activity reveals a stronger, more diverse DApp ecosystem. As user attention spreads more evenly across sectors and emerging technologies like AI deepen their integration, Web3’s landscape is evolving toward a more resilient and sustainable infrastructure.

May’s user activity patterns showed a gradual shift from speculative trends toward utility-focused DApps. While April’s meme coin frenzy, led by platforms like Pump.fun, drew massive attention, this momentum appears to be cooling. By May, Pump.fun had declined from its peak, suggesting meme coin trading may have reached saturation—at least for now.

In contrast, DeFi DApps saw notable UAW growth, particularly Uniswap V2, which benefited from strong activity on Base. On May 4, Uniswap announced integration with Soneium, a major development that expands its L2 presence and merges DeFi with entertainment and consumer tech.

In gaming, World of Dypians continued to dominate, consistently ranking among the top by monthly active users. Its immersive world-building and loyal community are proving key to sustained engagement—a rarity in a category often plagued by fleeting player interest.

Meanwhile, in AI and social, SubHub gained traction by combining personalized Web3 messaging with AI-enhanced delivery infrastructure. Positioned at the intersection of messaging, wallets, and smart targeting, SubHub exemplifies how AI DApps are building loyal user bases beyond hype cycles.

May’s top DApps reflect a broader trend: while speculative surges drive short-term spikes, long-term retention increasingly hinges on utility and innovation. Whether through AI-powered communication, immersive gaming, or L2 DeFi expansion, rising DApps now offer not just speculation but usability and functionality.

DeFi extended its upward trajectory in May, with TVL growing 25% to ~$200 billion. This recovery aligned with broader market gains—Bitcoin hitting new all-time highs and Ethereum surging 40%, both boosting DeFi asset valuations and liquidity depth.

All major DeFi ecosystems saw TVL growth, signaling renewed investor confidence and livelier on-chain activity. One project stood out:

Hyperliquid, a decentralized exchange, recorded $244 billion in trading volume—capturing ~10% of Binance’s market share. This performance placed Hyperliquid among:

• Top 5 exchanges (CEX + DEX) by volume

• Top 10 chains by TVL

This marks a pivotal shift in how on-chain derivatives protocols compete with CeFi giants, signaling the maturation of decentralized perpetuals and derivatives.

Beyond metrics, key May updates shaping DeFi included:

• Ethereum’s Pectra Upgrade: Introduced EIP-7702 (account abstraction for wallet flexibility) and EIP-7251 (raising validator rewards cap to 2,048 ETH).

• XRP Ledger’s EURØ Stablecoin: The first MiCA-compliant euro-pegged stablecoin, marking a new phase in DeFi regulation.

• U.S. GENIUS Act Progress: A bipartisan stablecoin bill advanced, signaling growing regulatory clarity.

• South Korea’s Crypto ETF Push: Plans to approve spot ETFs and ease banking restrictions for exchanges.

With protocol upgrades, clearer regulations, and market growth, DeFi is rebuilding toward a more mature and resilient future. May 2025 proved the sector’s evolution in both infrastructure and institutional relevance.

AI’s global dominance continues, with its Web3 impact becoming undeniable. As industries race to integrate AI, AI-powered DApps are gaining steady ground in decentralized ecosystems. This isn’t just hype—it reflects a societal shift toward open, user-owned tech.

This month’s top AI DApps remained stable, underscoring early leaders’ staying power. The standout newcomer was SubHub, an AI-enhanced Web3 notification platform by Dmail. It personalizes messaging via wallet addresses and decentralized identifiers (DIDs), tapping into demand for autonomous, targeted outreach over traditional marketing.

SubHub’s rise highlights the merging of social and AI DApps, creating user-centric experiences across Web3’s infrastructure layers.

Other notable AI x blockchain developments:

• ThinkAgents.ai launched an open-source protocol for decentralized AI agents.

• Tether announced a decentralized AI platform blending P2P communication with crypto-native integration.

• Assisterr (Solana) raised $2.8M to support no-code small language model (SLM) deployment.

• Donut Labs secured $7M to build an AI-powered Web3 browser.

• BingX pledged $300M over three years to integrate AI into its trading ecosystem.

A Harris Poll (May 29) commissioned by Digital Currency Group found:

• 77% of Americans believe decentralized AI benefits society more than centralized models.

• 56% prefer AI development via decentralized systems.

These figures underscore a cultural shift aligning with Web3’s values of transparency, user ownership, and anti-monopoly.

NFT markets showed signs of revival in May, with trading volume rising 40% to $280 million. Transactions also grew 35% to 2.7 million. While encouraging, this doesn’t yet signal a full recovery—sustained growth over months is needed.

Ethereum reclaimed dominance (+30%, 53% of total volume), followed by Immutable zkEVM (13%) and Abstract (+1200%, driven by speculative airdrop farming). Art-based NFTs (e.g., Good Vibes Club) and domain NFTs (TON/Telegram-linked) led sector growth, highlighting messaging platforms’ potential as NFT hubs.

Key May developments reshaping NFTs:

• Apple dropped its 30% NFT tax on iOS, easing barriers for mobile NFT markets.

• OpenSea launched OS 2.0, expanding to fungible tokens and memecoins across 19 chains.

• FIFA migrated its NFT platform to an Ethereum-compatible chain for broader accessibility.

• RWA tokenization gained traction, with Courtyard (physical asset NFTs) surpassing $55M in volume.

Though NFT enthusiasm is rebounding, much activity remains tied to incentives and speculation. If sustained, this could herald a new phase—one merging utility, accessibility, and real-world use cases.

Despite fewer incidents than April, May’s hacks and exploits remained alarming. The REKT database recorded $275 million lost across just 7 incidents—the third-worst month in a year, exceeding combined losses from November to March.

While this was a 95% drop from April’s record (driven by the Mantra DAO exploit), the severity of individual attacks underscored systemic vulnerabilities. Notable incidents:

• Cetus Protocol exploit: $260M (Sui network DEX attack).

• Cork Protocol exploit: ~$12M (wstETH theft via smart contract flaw).

• Mobius Token (MBU) incident: ~$2.16M (BSC exploit, possible "rug pull").

May’s data confirms Web3 remains highly vulnerable. With multi-million-dollar attacks persisting, stricter audits, real-time risk monitoring, and better user/developer education are urgently needed.

May was a pivotal month for DApps, marking broad recovery and maturing industry dynamics. With 25M dUAW and rising engagement—powered by growth in DeFi, NFTs, AI, and social sectors—the ecosystem is stabilizing.

The shift from hype-driven to utility-focused participation is clear. While meme coins cooled, platforms like Hyperliquid (DeFi) and SubHub (AI) gained prominence, showing users favor functionality and innovation.

DeFi’s 25% TVL growth reflects restored market confidence, bolstered by upgrades and policy progress. NFTs surged 40%, with Ethereum regaining dominance and RWA gaining attention. AI’s momentum is undeniable, both in adoption (matching DeFi/gaming activity) and public sentiment (77% prefer decentralized AI).

In short, the DApp industry is transitioning from volatile experimentation to grounded growth. With diversified user activity and tangible applications of AI and other technologies, the ecosystem is entering a new phase—defined not just by trends but by infrastructure, balance, and long-term resilience.