DeFi Declines, AI Soars: Q1 2025 by the Numbers

The year 2025 begins on a contrasting note for the crypto industry. While DeFi protocols are suffering from a marked drop in their total value locked (TVL), decentralized applications, particularly those focused on artificial intelligence (AI) and social networks, are showing solid growth. What are the drivers of these opposing dynamics, and what prospects lie ahead for the ecosystem in the months to come?

The slowdown of DeFi protocols in the first quarter of 2025

The DeFi sector experienced a significant drop in the first quarter of 2025, with a 27% decrease in TVL, which fell to $156 billion from $251 billion in 2024. Among the factors contributing to this decline are widespread economic uncertainty and incidents such as the hacking of Bybit.

Moreover, major blockchains such as Ethereum, Solana, and Tron have recorded notable declines in their TVL, while initiatives like Berachain have seen slight success. The drop in the price of ETH, which fell by 45% during this period, has also generally impacted the DeFi sector, exacerbating the difficulties faced by these protocols.

Additionally, the dApps industry has also shown signs of slowing down, with a 3% decrease in unique daily active wallets (dUAW), bringing the total to 24 million. This trend could be explained by increasing competition and the emergence of new economic models. However, certain categories, particularly AI-centric dApps, seem to be less affected by these fluctuations and continue to grow, thus reinforcing the resilience of this space.

The rise of AI and social applications

Speaking of artificial intelligence, AI and social applications are experiencing robust growth. Daily active users of these applications have increased by 29%, while social networks have grown by 10%.

Artificial intelligence, far from being a mere concept, is becoming a major driver of user behavior, transforming their interaction with blockchain. As for social applications, they continue to attract significant engagement despite a volatile market environment.

Prospects for the upcoming quarters

Could the DeFi sector see a rebound? Although the current drop is concerning, measures to stabilize TVL and stimulate engagement are possible. Meanwhile, dApps, especially those related to AI and social networks, are likely to continue growing, and their market share could further increase in the months ahead.

The first quarter of 2025 has thus revealed a changing crypto sector. While DeFi is going through a difficult time and the NFT market has collapsed by 63%, AI and social applications, on the other hand, are on the rise. The future of the crypto industry will depend on the ability of players to adapt to an increasingly competitive and volatile market while fostering innovation.