The Web3 ecosystem is heating up again—and this time, AI is leading the charge.
According to a new report from DappRadar, AI-related dapps now represent 18.8% of all industry activity, nearly matching DeFi (19.3%) and gaming (19.4%). This dramatic rise suggests that AI is no longer a niche use case, but a core pillar of the decentralized application economy.
At the same time, DeFi engagement is making a strong comeback, riding on the tailwinds of increased TVL and renewed institutional interest.
Let’s break down the trends driving this resurgence.
AI Dapps Surge to the Top
In May 2025, the share of AI applications in Web3 activity jumped significantly, overtaking Social (17.1%) and NFTs (15.5%) in user engagement.
Source: Dapparadar
Projects integrating AI-powered trading, predictive models, and decentralized agents are seeing unprecedented adoption, particularly among yield aggregators and protocol governance tools. Analysts suggest that AI is lowering the barrier to entry in complex DeFi ecosystems, allowing even novice users to benefit from intelligent automation.
Many of these dapps are also leveraging real-time on-chain data, AI oracles, and zero-knowledge models to drive higher engagement without compromising privacy.
DeFi Isn’t Done Yet – TVL Back to $200B
While AI is dominating headlines, DeFi’s comeback is equally noteworthy.
Total Value Locked (TVL) across DeFi protocols has rebounded to over $200 billion, a level not seen since the previous bull cycle. According to DappRadar, DeFi dapps have seen a sharp rise in user activity and transaction volume, with lending protocols, L2-native DEXs, and staking aggregators at the forefront.
This renewed interest can be attributed to:
- The launch of more scalable Layer 2 solutions
- Higher ETH staking participation post-Dencun upgrade
- An influx of capital from institutional desks and ETFs
Notably, this trend comes amid growing attention on AI-DeFi hybrids, which are bridging analytics, automation, and smart contract execution into single, composable platforms.
Final Thoughts: Web3 Is Evolving – and AI Is at the Center
The data is clear: Web3 is entering a new phase, where artificial intelligence, decentralized finance, and social applications are converging to reshape the future of user-owned networks.
With AI now commanding nearly 1 in 5 users in the dapp ecosystem, the race is on to integrate intelligent infrastructure at the protocol layer. Expect more launches, VC backing, and user migration toward tools that blend data-driven logic with permissionless value flows.If DeFi was the spark, AI could be the fuel that takes Web3 mainstream.
