Author: DappRadar
Translated by: Felix, PANews
May 2025 is a turning point for the Dapp (decentralized application) industry. With rising user activity, the strong comeback of DeFi, and the consolidation of AI's position in Web3, the ecosystem shows signs of stability and maturity. From market recovery to infrastructure upgrades and shifts in user preferences, May highlighted how Dapps continue to evolve in long-term utility, rather than just in hype cycles.
Key Points:
- Daily active unique wallets (dUAW) reached 25 million in May, growing 8%, indicating a healthy development trend across the ecosystem.
- DeFi Total Value Locked (TVL) grew 25%, reaching $200 billion, thanks to a 40% increase in ETH price and Hyperliquid's $244 billion in trading volume.
- NFT trading volume increased 40% to $280 million, with transaction count growing 35%, primarily driven by ETH, Abstract, and Telegram-related domains.
- AI dapps' daily active user wallets (dUAW) reached 4.8 million, growing 23%, on par with user engagement in DeFi and gaming sectors.
- Lost $275 million due to Web3 vulnerabilities - the third most loss-intensive month in a year, exceeding the total from November to March.
- EIP-7702: Introducing account abstraction, providing smart contract-like functionality for ordinary wallets, including batch transactions and Gas fee sponsorship.
- EIP-7251: Raising the validator reward cap from 32 ETH to 2048 ETH, allowing institutional stakers to earn compounded staking rewards and improve capital efficiency.
XRP Ledger Launches EURØP Stablecoin
Ripple launched EURØP, a stablecoin pegged to the euro, fully compliant with the European Union's Markets in Crypto-Assets Regulation (MiCA). This makes it the first major stablecoin compliant with MiCA regulations, marking a new stage of regulatory compliance in DeFi.
US GENIUS Bill Makes Progress
The US Senate passed a motion to end debate on the bipartisan GENIUS bill with a vote of 66 to 32, aimed at promoting federal regulation of stablecoin issuers. The bill's progress ends a long-standing lengthy debate, indicating an increasing regulatory momentum in Washington.
South Korea Considers Approving Crypto ETF
The ruling party in South Korea promised to approve spot cryptocurrency ETFs and relax bank restrictions on exchanges, which could significantly enhance the accessibility of cryptocurrencies in the highly active retail market in Asia.
With the rebuilding of DeFi infrastructure, protocol-level upgrades, regulatory clarity, and market growth, it suggests a more mature and resilient future for DeFi. Despite ongoing risks, the performance in May 2025 proves that DeFi is continuously developing in infrastructure and institutional relevance.
4. AI's Momentum Continues to Grow in Web3, Public Calls for Decentralized Intelligence
AI continues to dominate globally, with its impact on Web3 becoming increasingly significant. As industries compete to integrate AI, AI-driven dapps are steadily developing in decentralized ecosystems. Therefore, this is not just hype, but a trend reflecting society's shift towards open, user-autonomous technology.
The best-performing AI dapps this month remained overall stable, highlighting the strong endurance of early market leaders.
The most notable newcomer on the list is SubHub, an AI-enhanced Web3 notification and marketing platform developed by Dmail. It aims to optimize project-audience interactions through wallet addresses and decentralized identifiers (DIDs). SubHub positions itself at the intersection of AI, communication, and social DApps, reflecting the growing demand for autonomous, targeted, and decentralized promotion methods as users become tired of traditional centralized marketing models.
SubHub combines intelligent messaging and wallet-based targeting capabilities, reinforcing the concept of increasing integration between social and AI DApps, thereby achieving a user-centric experience across multiple layers of Web3 infrastructure.
Beyond DApps, significant progress was made in the AI x blockchain field this month:
- ThinkAgents.ai released the open-source "Think Agent Standard", a protocol for deploying autonomous agents in decentralized networks, taking a step towards interoperable on-chain AI.
- Tether announced its entry into the AI field, planning to launch a decentralized AI platform combining peer-to-peer communication with native crypto integration.
- Assisterr (Solana) raised $2.8 million at a $75 million valuation to support no-code deployment of small language models (SLM) - providing composable AI tools without heavy development costs.
- Donut Labs secured $7 million in seed funding to build the first "agent" Web3 browser, combining AI functionality with crypto wallets and DEX.
- Global exchange BingX committed to investing $300 million over three years in its "AI Evolution" roadmap - integrating AI into its trading engine and ecosystem.
Perhaps most telling is the growing public sentiment supporting decentralized AI. A poll commissioned by Digital Currency Group and conducted by Harris Poll (May 29) revealed:
- 77% of Americans believe decentralized AI is more beneficial to society than centralized models.
- 56% prefer AI development through decentralized systems.
- These figures highlight a cultural shift aligned with Web3's values of transparency, user ownership, and anti-monopoly principles.
5. NFT Growth 40%: True Recovery or Short-term Surge?
(The translation continues in the same manner for the rest of the text.)6. Web3 Domain Losses Reach $275 Million This Month
Although the number of individual events in May was less than in April, the losses from hacker attacks and vulnerability exploits remain deeply concerning. According to the REKT database, just 7 events caused over $275 million in losses, making it the third-highest loss month in the past year, exceeding the total losses of November, December, January, and March.
Although this figure represents a 95% drop from the record losses in April, primarily due to the Mantra DAO event, viewing this as a sign of recovery would be misleading. The severity of single attacks in May highlights the persistent systemic vulnerabilities in the dapp ecosystem.
Notable Vulnerability Events This Month:
Cetus Protocol Vulnerability: $260 Million
On May 22, the decentralized exchange Cetus Protocol on the Sui network suffered a massive attack, resulting in $260 million in losses. Token prices on the platform plummeted, with some tokens losing over 90% of their value. The team immediately suspended smart contract operations to control losses and launch an investigation.
Cork Protocol Vulnerability: Approximately $12 Million
On May 28, the Cork Protocol encountered a smart contract vulnerability, leading to the theft of approximately 3,760 wstETH worth around $12 million. This attack exposed critical flaws in the contract logic, immediately triggering community alerts.
Mobius Token (MBU) Incident: Approximately $2.16 Million
On May 11, on the Binance Smart Chain, a suspicious interaction with an unverified contract resulted in $2.16 million in losses. Although this incident appeared to be a typical vulnerability exploit, various indications suggest it might have been a "rug pull," further blurring the lines between technical vulnerabilities and malicious actions.
The data from May clearly indicates that despite improved tools and awareness, the Web3 domain remains highly vulnerable. Continuous attacks involving millions of dollars urgently require stricter audit standards, real-time risk monitoring, and better education for developers and users.
7. Conclusion
May was a crucial month for the dapp ecosystem, marking a comprehensive recovery and maturation of industry dynamics. Daily active wallets reached 25 million, with user engagement trending upward, thanks to growth in key vertical areas like DeFi, Non-Fungible Tokens, AI, and social platforms.
The shift from hype-driven activities to utility-focused participation has become increasingly clear. While meme coins may have cooled down, decentralized financial protocols like Hyperliquid and AI dapps like SubHub are becoming increasingly important, indicating that users are gravitating towards platforms offering functionality, innovation, and genuine value.
DeFi Total Value Locked (TVL) grew by 25%, reflecting market confidence restored through infrastructure upgrades and policy advancements. Simultaneously, Non-Fungible Token trading volume surged 40%, with Ethereum regaining dominance, and Real World Assets (RWA) gaining significant attention. AI's momentum continues to strengthen, not only in public sentiment (77% of Americans prefer decentralized AI) but also in usage, comparable to gaming and DeFi user activity.
In summary, the DApp industry is transitioning from a turbulent experimental phase to a more foundationally stable development stage. With diversifying user activities and practical applications of technologies like AI, the ecosystem is entering a new phase defined not just by trends, but by infrastructure, balance, and long-term resilience.
Related Reading: Comprehensive Overview of DeFi Development: Aave and Lido Top TVL Protocols, Solana Ranks Second in Public Chains
