Key takeaways:
Web3 daily activity held steady at 24 million in Q2 2025, but sector composition is shifting.
DeFi leads transaction counts with 240 million weekly, yet Ethereum gas usage is now dominated by the RWA, DePIN and AI.
Smart contract platforms’ coins and yield-generating DeFi and RWA tokens outperform the market, while AI and DePIN lag despite strong narratives.
Altcoins are more than speculative bets on coins outside Bitcoin. In most cases, they represent — or aim to represent — specific activity sectors within Web3, a decentralized alternative to the legacy internet and its services.
Assessing the state and potential of the altcoin market means looking beyond prices. Key indicators such as gas usage, transaction counts and unique active wallets (UAW) help gauge activity and adoption, while coin price performance reveals whether markets follow onchain trends.
AI and social DApps gain adoption
UAW counts distinct addresses interacting with DApps, offering a proxy for adoption breadth, though multiple wallets per user and automated activity can skew results.
DappRadar’s Q2 2025 report shows steady daily wallet activity at around 24 million. Yet a shift in sector dominance is emerging. Crypto gaming remains the largest category, with over 20% market share, though down from Q1. DeFi has also slipped, falling to less than 19% from over 26%.
In contrast, Social and AI-related DApps are gaining traction. Farcaster leads Social with roughly 40,000 daily UAW, while in AI, agent-based protocols like Virtuals Protocol (VIRTUAL) are standing out, attracting 1,900 weekly UAW.
DeFi attracts big players
Transaction counts show how often smart contracts are triggered, but can be inflated by bots or automation.
DeFi’s transaction footprint is paradoxical. Its user base has declined, yet it still generates over 240 million weekly transactions — more than any other Web3 category. Exchange-related activity (can overlap with DeFi) adds to this dominance, with crypto gaming trailing at 100 million weekly transactions and the “Other” category (excluding Social but including AI) at 57 million.
Total value locked (TVL) tells an even stronger story. According to DefiLlama, DeFi TVL has reached $137 billion — up 150% since January 2024, though still below its $177 billion peak in late 2021.
The divergence between rising TVL and falling UAW reflects a key theme of this crypto cycle: institutionalization. Capital is concentrating in fewer, larger wallets, which now also include funds. This trend is still young, as DeFi faces regulatory uncertainty in many jurisdictions.
Still, institutions are testing the waters by providing liquidity to permissioned pools, lending against tokenized treasuries from platforms like Ondo Finance (ONDO) and Maple (SYROP), the latter also known for its partnership with the investment bank Cantor Fitzgerald.
Meanwhile, protocol-level automation offered by DeFi services like Lido (LIDO) or EigenLayer (EIGEN) further dampens wallet activity, as DeFi evolves into a capital-efficient layer geared toward large-scale yield generation rather than retail participation.
Other use cases dominate gas
Transaction data alone doesn’t capture the complete Web3 picture. Ethereum gas usage can show where economic and computational weight truly lies.
Glassnode data reveals that DeFi, despite being Ethereum’s key sector, now accounts for just 11% of its gas consumption. NFTs, which used a sizeable share of gas back in 2022, have now fallen to 4%.
The “Other” category, however, has surged to over 58% today from about 25% in 2022. This category covers emerging areas such as real-world asset tokenization (RWA), decentralized physical infrastructure (DePIN), AI-based DApps and other more or less novel services that may define Web3’s next growth phase.
RWA, in particular, is often referred to as one of the most promising crypto sectors. Excluding stablecoins, total RWA value has surged from $15.8 billion at the start of 2024 to $25.4 billion today, with an estimated 346,250 tokenholders.
Related: How high will Ethereum price go after breaking $4K? ETH analysts weigh in
Do prices follow Web3 narratives?
Asset prices rarely move in lockstep with onchain activity. While hype can drive short-term spikes, sustained gains tend to align with sectors delivering tangible utility and adoption. Over the past year, this has meant infrastructure and yield-focused projects outpacing narrative-driven plays.
Smart contract platform coins posted the strongest gains, with the top 10 up an unweighted 142% on average, led by HBAR (+360%) and XLM (+334%). As the foundational layer of Web3, their price growth signals investor confidence in the sector’s long-term development. DeFi tokens also fared well, averaging 77% YoY, with Curve DAO (CRV) up 308% and Pendle (PENDLE) up 110%.
The top 10 RWA tokens gained 65% on average, driven by XDC (+237%) and OUSG (+137%). DePIN’s top performers, JasmyCoin (JASMY) at +72% and Aethir (ATH) at +39%, could not prevent the sector’s average from hovering around +10%.
AI tokens have been the clear laggards: The top 10 strictly AI-focused projects are down 25% YoY, with Bittensor (TAO) the only standout at +34%. Gaming tokens mostly posted losses, with only SuperVerse (SUPER) gaining 750% in the past 12 months. Social tokens remain largely absent in the crypto space, as leading protocols still lack native assets.
Overall, Web3 investment remains concentrated in mature sectors, driving up the native currencies of leading smart contract platforms. Yield-focused DeFi and RWA tokens have also delivered solid returns. In contrast, the sectors behind the most hyped narratives — AI, DePIN, and Social — have yet to translate attention into meaningful token gains.
As adoption deepens and more sectors mature, the gap between narrative and performance may narrow — but for now, investor confidence is clearly rooted in the building blocks of the decentralized economy.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
