Time for a Web3 reality check: Which altcoin sectors are really delivering?

Key takeaways:

• Web3 regular enactment held dependable astatine 24 cardinal successful Q2 2025, but assemblage creation is shifting.

• DeFi leads transaction counts with 240 cardinal weekly, yet Ethereum state usage is present dominated by the RWA, DePIN and AI.

• Smart declaration platforms’ coins and yield-generating DeFi and RWA tokens outperform the market, portion AI and DePIN lag contempt beardown narratives.

Altcoins are much than speculative bets connected coins extracurricular Bitcoin. In astir cases, they correspond — oregon purpose to correspond — circumstantial enactment sectors wrong Web3, a decentralized alternate to the bequest net and its services.

Assessing the authorities and imaginable of the altcoin marketplace means looking beyond prices. Key indicators specified arsenic state usage, transaction counts, and unsocial progressive wallets (UAW) assistance gauge enactment and adoption, portion coin terms show reveals whether markets travel onchain trends.

AI and societal DApps summation adoption

UAW counts chiseled addresses interacting with DApps, offering a proxy for adoption breadth, though aggregate wallets per idiosyncratic and automated enactment tin skew results.

DappRadar’s Q2 2025 report shows dependable regular wallet enactment astatine astir 24 million. Yet a displacement successful assemblage dominance is emerging. Crypto gaming remains the largest category, with implicit 20% marketplace share, though down from Q1. DeFi has besides slipped, falling from implicit 26% to beneath 19%. In contrast, Social and AI-related DApps are gaining traction. Farcaster leads Social with astir 40,000 regular UAW, portion successful AI, agent-based protocols similar Virtuals Protocol (VIRTUAL) are lasting out, attracting 1,900 play UAW.

DApp manufacture dominance by UAW. Source: DappRadar

DeFi attracts large players

Transaction counts amusement however often astute contracts are triggered, but tin beryllium inflated by bots oregon automation.

DeFi’s transaction footprint is paradoxical. Its idiosyncratic basal has declined, yet it inactive generates implicit 240 cardinal play transactions — much than immoderate different Web3 category. Exchange-related enactment (can overlap with DeFi) adds to this dominance, with crypto gaming trailing astatine 100 cardinal play transactions and the “Other” class (excluding Social but including AI) astatine 57 million.

DApps transaction per category. Source: DappRadar

Total worth locked (TVL) tells an adjacent stronger story. According to DefiLlama, DeFi TVL has reached $137 cardinal — up 150% since January 2024, though inactive beneath its $177 cardinal highest successful precocious 2021. The divergence betwixt rising TVL and falling UAW reflects a cardinal taxable of this crypto cycle: institutionalization. Capital is concentrating successful fewer, larger wallets, which present besides see funds. This inclination is inactive young, arsenic DeFi faces regulatory uncertainty successful galore jurisdictions. Still, institutions are investigating the waters by providing liquidity to permissioned pools, lending against tokenized treasuries from platforms similar Ondo Finance (ONDO) and Maple (SYROP), the second besides known for its concern with the concern slope Cantor Fitzgerald.

Meanwhile, protocol-level automation offered by DeFi services similar Lido (LIDO) oregon EigenLayer (EIGEN) further dampens wallet activity, arsenic DeFi evolves into a capital-efficient furniture geared toward large-scale output procreation alternatively than retail participation.

Other usage cases predominate gas

Transaction information unsocial doesn’t seizure the implicit Web3 picture. Ethereum state usage tin amusement wherever economical and computational value genuinely lies. 

Glassnode data reveals that DeFi, contempt being Ethereum’s cardinal sector, present accounts for conscionable 11% of its state consumption. NFTs, which utilized a sizeable stock of state backmost successful 2022, person present fallen to 4%. The “Other” category, however, has surged from astir 25% successful 2022 to implicit 58% today. This class covers emerging areas specified arsenic real-world plus tokenization (RWA), decentralized carnal infrastructure (DePIN), AI-based DApps, and different much oregon little caller services that whitethorn specify Web3’s adjacent maturation phase.

Ethereum state usage by category. Source: Glassnode

RWA, successful particular, is often referred to arsenic 1 of the astir promising crypto sectors. Excluding stablecoins, full RWA worth has surged from $15.8 cardinal astatine the commencement of 2024 to $25.4 cardinal today, with an estimated 346,250 tokenholders.

Related: How precocious volition Ethereum terms spell aft breaking $4K? ETH analysts measurement in

Do prices travel Web3 narratives?

Asset prices seldom determination successful lockstep with onchain activity. While hype tin thrust short-term spikes, sustained gains thin to align with sectors delivering tangible inferior and adoption. Over the past year, this has meant infrastructure and yield-focused projects outpacing narrative-driven plays.

Smart declaration level coins posted the strongest gains, with the apical 10 up an unweighted 142% connected average, led by HBAR (+360%) and XLM (+334%). As the foundational furniture of Web3, their terms maturation signals capitalist assurance successful the sector’s semipermanent development. DeFi tokens besides fared well, averaging 77% YoY, with Curve DAO (CRV) up 308% and Pendle (PENDLE) up 110%.

The apical 10 RWA tokens gained 65% connected average, driven by XDC (+237%) and OUSG (+137%). DePIN’s apical performers, JasmyCoin (JASMY) astatine +72% and Aethir (ATH) astatine +39%, could not forestall the sector’s mean from hovering astir +10%.

AI tokens person been the wide laggards: the apical 10 strictly AI-focused projects are down 25% YoY, with Bittensor (TAO) the lone standout astatine +34%. Gaming tokens mostly posted losses, with lone SuperVerse (SUPER) gaining 750% successful the past 12 months. Social tokens stay mostly absent successful the crypto space, arsenic starring protocols inactive deficiency autochthonal assets. 

Overall, Web3 concern remains concentrated successful mature sectors, driving up the autochthonal currencies of starring astute declaration platforms. Yield-focused DeFi and RWA tokens person besides delivered coagulated returns. In contrast, the sectors down the astir hyped narratives — AI, DePIN, and Social — person yet to construe attraction into meaningful token gains. As adoption deepens and much sectors mature, the spread betwixt communicative and show whitethorn constrictive — but for now, capitalist assurance is intelligibly rooted successful the gathering blocks of the decentralized economy.

This nonfiction is for wide accusation purposes and is not intended to beryllium and should not beryllium taken arsenic ineligible oregon concern advice. The views, thoughts, and opinions expressed present are the author’s unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.