As of April, AI DApps reached 16% market share, up from 11% in February. Meanwhile, both DeFi and gaming sectors saw declines, each falling to 4.8 million daily unique active wallets (dUAW).

AI-Powered Use Cases Drive Growth

AI DApps recorded an impressive 26% jump in activity in April, reaching 3.8 million dUAW. According to DappRadar analyst Sara Gherghelas, this is not just hype. “AI DApps are bringing real utility to users, and that’s driving long-term engagement,” she said.

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At the top of the list is LOL, an AI mining platform that rewards users with tokens based on their laughter’s pitch and frequency via Telegram. Dmail Network, a decentralized AI-based messaging service, ranks second, followed by World.Fun, which helps deploy AI agents in multi-agent simulations.

“These projects show staying power. They’re building, not just trending,” Gherghelas emphasized.

Social DApps Surge As Web3 Holds Steady

Social DApps also saw growth, rising 18% to hit 3.6 million daily users, with total market share crossing 15%. Despite macroeconomic headwinds like US tariffs, Web3 overall remains resilient, with 23 million dUAW in April — only slightly below February’s 24 million.

DappRadar highlights that memecoin narratives and AI functionality are major user engagement drivers in today’s Web3 landscape.

With the rise of AI agents, utility-driven design, and sustained user growth, the next phase of Web3 may look far more intelligent — and decentralized — than ever before.

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Existing Capital is Being Recycled

Agranat pointed out that the funds in blockchain gaming are simply being redistributed rather than attracting new investments. He described it as a “game of musical chairs,” where projects compete for the same pool of capital.

According to DappRadar, blockchain gaming investments fell sharply, from $222 million in December 2024 to just $16 million in January 2025, marking a 92% decline.

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Additionally, the number of unique active wallets (UAW) in blockchain gaming dropped from 10 million in mid-2024 to 7.5 million today, with 70% of Q1 2024 growth driven primarily by airdrops and farming campaigns.

Airdrop Farming and Sustainability Concerns

Agranat criticized the industry’s reliance on airdrop farming, where users create multiple wallets to claim rewards without genuine engagement.

“They will just go from project to project and extract whatever value they can. Once there’s no more value, they move on,” he stated.

Future of Blockchain Gaming

Agranat emphasized that blockchain games need to focus on gameplay experience to attract real players rather than speculative users.

This sentiment was echoed by Kori Leon, co-founder of Pixelverse, who previously noted that many Web3 gaming projects fail despite strong funding.

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Key AI DApps such as Data Intelligence Network (DIN) and Alaya AI led this growth. DIN, a modular data pre-processing platform launched in April 2024, reached 1 million daily UAWs, while Alaya, a data collection and labeling platform, maintained stable activity at around 100,000 wallets.

However, the decentralized finance (DeFi) sector saw a decline, with the total value locked (TVL) dropping from $168 billion to $160 billion. Ethereum’s TVL also fell by 20% to $95 billion. In contrast, layer-1 blockchains Sui and Aptos emerged as top performers, each achieving a 78% rise in TVL, reaching $1.6 billion and $1.3 billion, respectively.

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The non-fungible token (NFT) industry, meanwhile, experienced a significant downturn, with trading volumes plummeting by 60% to $1.6 billion. NFT sales also dropped 23% to 11.5 million. While OpenSea saw a rebound, leading in sales and trading volume with $570 million, Competitors like Blur and Magic Eden faced sharp declines due to diminishing airdrop incentives and changes in royalty structures. Additionally, the hype around Bitcoin Ordinals, which had fueled activity on Magic Eden, faded significantly.

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