July Web3 Market Review: NFT trading volume big pump, DeFi Lock-up Position hits a new high

In July 2025, the Web3 market showed a complex situation. Although the overall wallet activity declined, the NFT and DeFi sectors performed brilliantly. During the month, the average daily active wallet count dropped to 22 million, a year-on-year decrease of 8%. However, NFT trading volume surged by 96%, and user activity surpassed DeFi for the first time. At the same time, the total Lock-up Position (TVL) reached a historic high of 270 billion USD, with the market value of tokenized stocks skyrocketing by 220%.

Nevertheless, the market is not entirely peaceful. Losses from hacker attacks have reached $132 million. Most AI-related decentralized applications have seen a double-digit decline in usage, despite AI still being regarded as one of the most promising fields. On the regulatory front, the United States has passed several important cryptocurrency bills, and the global regulatory framework is gradually becoming clearer.

From the strong performance of blue-chip NFTs to record flows of funds in DeFi, the data from July indicates that the Web3 industry is not stagnant, but is seeking new directions for development.

Main Observations

1. The number of daily active wallets has decreased to 22 million, a month-on-month decrease of 8%.
2. Game applications account for the highest proportion ( 22.4% ), followed by AI ( 18.7% ) and NFT ( 17.5% ).
3. NFT volume increased by 96% to $530 million, with the average price doubling to $105.
4. DeFi TVL reached a new high of 270 billion USD on July 28, with a month-on-month increase of 30%.
5. The activity level of AI applications generally declined, but Dmail, XPIN, and ChainGPT grew against the trend.
6. In July, a loss of $132 million due to security vulnerabilities, an increase of 16% compared to June.

Performance in Various Fields

User Activity Level

In July, user activity across various fields of Web3 showed divergence. The social sector experienced the most significant cooling, with daily active users dropping by 27% to 2.8 million. The AI sector also saw a 14% decline, with active users falling to 4.1 million. DeFi continued its recent downturn, shrinking by 6%. In contrast, the gaming sector demonstrated resilience, growing by 2%, while NFT remained basically flat.

Gaming continues to lead the Web3 ecosystem, capturing 22.4% of the market share. AI and NFT closely follow, accounting for 18.7% and 17.5%, respectively. It is worth noting that DeFi has fallen from its dominant position two months ago to below NFT, reflecting a shift in user behavior.

The most popular decentralized applications

Decentralized exchanges based on Solana still dominate the market, with the meme coin craze driving retail trading activity. In terms of gaming, "World of Dypians" maintains a stable user base and continues to grow. Two AI applications have entered the top rankings, showing sustained user interest in AI-driven Web3 experiences. Despite a decline in overall market share for DeFi, it still holds an important position in the list of popular applications, reflecting that successful DeFi projects often achieve higher activity and loyalty.

AI Application Development

In July, the activity levels of most AI applications decreased, but projects such as Dmail Network, XPIN Network, and ChainGPT experienced growth against the trend. Lightchain AI launched a mainnet specifically designed for on-chain machine learning, showcasing the future development direction of decentralized AI infrastructure. Theta Network integrated Amazon's AI chips to support applications such as "Quakebot." Protocols like Aethir and Render Network are promoting the development of decentralized computing. The ASI Alliance officially merged, aiming to create a fully decentralized AGI stack.

In the gaming sector, Elympics has launched the $ELP token, combining AI-driven "Agentic Gaming" with well-known NFT IPs. AI tokens such as TAO, RNDR, and AGIX are favored by investors. Researchers have unveiled the AI agent A1, which can autonomously exploit smart contract vulnerabilities, highlighting the dual nature of AI as both a tool and a risk. In terms of regulation, the United States has enacted several bills to provide guidance for the AI and cryptocurrency sectors and has appointed special envoys for AI and cryptocurrencies, reflecting the increasing importance of AI in the blockchain space.

Decentralized Finance development

DeFi performed impressively in July, with a TVL increase of over 30%, reaching $259 billion by the end of the month. On July 28, DeFi TVL hit a historical high of $270 billion, reflecting increased market confidence, enhanced liquidity, and growing user demand for lending, trading, and tokenized assets. Tokenized stocks became a highlight, with the number of related wallets surging from 1,600 to 90,000, and the total market capitalization increasing by 220%, showing that the tokenization of physical assets (RWA) has begun to achieve economies of scale.

Ethereum's dominant position in the DeFi sector remains unchanged, with a TVL of $166 billion. The price of ETH rose nearly 60% in July, and the annualized yield for staking rewards surged to 29.4%. In the Solana ecosystem, Hyperliquid stood out, generating 35% of the chain's revenue in July, benefiting from the rising demand for derivatives.

In terms of policy, the United States has established a stablecoin framework and clarified the classification of digital assets through the "Genius Act" and the "Clarity Act". The SEC Chairman announced "Project Crypto", outlining a roadmap for the integration of DeFi and traditional finance.

NFT market

In July, the NFT market's activity surpassed that of Decentralized Finance, with volume increasing by 96% to $530 million. Although the number of sales decreased by 4%, the average price rose from $52 to $105, an increase of 103%. Blue-chip projects have once again become the focus, with large holders leading the market trend.

Blur dominates the Ethereum NFT volume, with a daily share of up to 80%. OpenSea maintains a leading user count thanks to long-tail assets and cross-chain activities. Zora gains attention with its creator-friendly L2 network and $ZORA token.

Traditional brands are continuously laying out their NFT strategies. Starbucks ends its Odyssey NFT loyalty pilot, Nike SWOOSH launches digital products and collaborates with EA Sports. Louis Vuitton, Rolex, and Coca-Cola ( China ) are conducting pilot programs related to authentication and collectibles NFTs. Netflix, NBA Top Shot, FIFA, and others continue to participate, but the licensing terms are becoming clearer.

NFT is evolving from speculation into a practical tool, shifting from mere collectibles and cultural symbols to applications such as identity, ticketing, gaming, and tokenization of physical assets.

security vulnerability

In July, losses caused by vulnerabilities exceeded $132 million, an increase of 16% compared to June. Major events include:

1. The Indian exchange CoinDCX suffered a server breach, resulting in a loss of $44 million, but user funds were not affected.
2. GMX v1 encountered a vulnerability on Arbitrum, resulting in a loss of $42 million, with the GLP mining pool affected.
3. Centralized exchange BigONE's hot wallet suffered unauthorized access, resulting in a loss of $28 million, and the platform has promised compensation.

These events remind us that Web3 security work is still ongoing. Whether participating in Decentralized Finance, NFT, or AI applications, users should carefully check smart contract permissions, avoid clicking on suspicious links, and use hardware wallets to protect their assets whenever possible.