DeFi TVL breaks through $237 billion to reach a new high, but are retail investors quietly leaving? Active wallets dropped sharply by 22% in the third quarter.

The Decentralized Finance (DeFi) industry reached a historic milestone by the end of Q3 2025, with the Total Value Locked (TVL) soaring to 237 billion USD. However, according to DappRadar's “Q3 2025 Dapp Industry Status” report, despite continuous technological developments driving TVL to new highs, on-chain data shows that the number of daily active unique Wallets has decreased by 22% month-over-month, raising concerns about whether retail users are quietly exiting the crypto market. The report points out that the rise of stablecoins is the main driver of DeFi TVL growth, but market activity has been hit hard in areas like Social and AI, while the NFT market has achieved explosive growth in volume thanks to the stronger confidence of its existing user base.

DeFi Market Divergence: TVL Hits New High, But User Activity Declines

(Source: DappRadar)

In the third quarter of 2025, the DeFi market shows a structural contradiction of “high value and low activity.”

· Stablecoins drive TVL rise: DappRadar researcher Robert Hoogendoorn pointed out that the rise of stablecoins is bringing DeFi into the spotlight of traditional finance, becoming the main driver of record high TVL.

· Ethereum's position remains solid but has slightly declined: in the 237 billion USD DeFi TVL, Ethereum still dominates, locking up over 49% of the value, which is 119 billion USD. However, its TVL has decreased by 4% month-on-month.

· Solana suffers a heavy blow: Solana maintains its position as the second largest DeFi chain but has experienced the most severe losses among the top ten public chains, with TVL plummeting 33% to 13.8 billion USD, mainly due to the decline in popularity of Pump.fun and meme coins.

· Emerging ecosystem expansion: Ecosystems such as BNB Chain, Plasma, Base, Tron, Arbitrum, Avalanche, and Hyperliquid have shown encouraging performance. Among them, Hyperliquid, which focuses on perpetual contracts, saw its TVL rise by 29% to reach $2.85 billion, indicating that decentralized exchanges are gradually aligning their functionality with mainstream CEXs.

Active wallets plummet by 22.4%, are retail users exiting?

Despite the record DeFi TVL, the Dapp industry has witnessed a sharp decline in the number of daily active unique Wallets, with an average of 18.7 million active Wallets per day throughout the third quarter.

· Concerns over retail exit: Compared to the peak from early 2025 to the second quarter, the number of active wallets in the third quarter has significantly declined, raising concerns about a potential exit from the retail market.

· Social and AI sectors suffered the most: Throughout the quarter, all Dapp categories experienced a decline in Wallet activity, with the Social and AI categories being the hardest hit.

· AI Field: The heat in the AI field is rapidly fading, with the average daily active Wallets dropping from 4.8 million in the second quarter to 3.1 million in the third quarter. For example, the daily active Wallets for the AI Agent launch platform Virtuals Protocol plummeted from 10,000 to 1,000 to 1,500.

· Social sector: Social Dapps have also been severely impacted, with the number of daily active Wallets dropping sharply from 3.8 million in the second quarter to 1.57 million in the third quarter, a decline of more than half.

NFT volume surged by 158%, but user growth momentum is insufficient

Against the backdrop of overall declining activity, the NFT market has risen against the trend, but the nature of this rise is worth pondering.

· NFT market share rise: The NFT market share has risen to 18.5%, ranking second. Its volume continues to climb in 2025, with third quarter sales reaching 18.1 million coins, a staggering 158% increase compared to the 12.5 million coins in the second quarter, with a total transaction amount of 1.6 billion USD.

· OpenSea token rewards promotion: The surge in volume is mainly attributed to OpenSea's reward activities for its upcoming token, designed to incentivize the most active traders. At the same time, the increased adoption of PFP (Profile Picture) projects such as CryptoPunks, Moonbirds, BAYC, and Pudgy Penguins has also played a role in this rise.

· User confidence is strengthening rather than an influx of new users: however, wallet participation in the NFT space only increased by 28.6%, far below the growth rate of volume. This indicates that market growth is primarily driven by stronger conviction from existing participants (i.e., more frequent trading) rather than an influx of new users.

Security Threats: Q3 Stolen Assets of 434 Million USD, Multi-Signature Wallets Become Target of Attacks

Despite the record DeFi TVL, security threats remain severe. In the third quarter of 2025, hackers stole over $434 million in crypto assets.

· Major Attack Incidents: The main attack incidents involve social engineering and contract vulnerabilities. This includes the malicious exploitation of the GMX V1 contract, resulting in a loss of 42 million USD, as well as the mainstream CEX CoinDCX suffering a loss of 44 million USD due to a server vulnerability.

· Multi-signature vulnerability: Recently, the Social project UXLINK was exploited in September due to a multi-signature vulnerability, resulting in the theft of assets worth 21.7 million USD. This highlights that while DeFi has reached a record TVL, digital security risks have not diminished, and malicious attackers are continuously seeking new vulnerabilities, especially targeting the multi-signature structures commonly used by institutions and project teams.

Conclusion

The DeFi market in the third quarter of 2025 presents a contradictory and complex side: it achieved a TVL breakthrough of $237 billion driven by institutions and technology, highlighting the industry's attraction to traditional finance. However, the sharp decline in daily active Wallets, especially the cooling in the AI and Social sectors, suggests that retail market participation is weakening. The prosperity of the NFT market is more about the increase in trading frequency among existing users rather than a massive influx of new users. This divergence between the “institutional” TVL growth and the “retail” activity decline signals both maturity and risk in the industry, urging the market to refocus on the return of retail users and the security of digital assets while continuing technological innovation.

This article is for news information only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make decisions cautiously.