Web3 Industry Overview for July: NFT volume surges, DeFi Lock-up Position reaches new highs

In July, the Web3 industry showed a complex development trend. Although the overall number of active wallet users slightly decreased to 22 million per day, down 8%, there are still several highlights in the industry worth noting. NFT trading volume surged by 96%, with user activity surpassing Decentralized Finance for the first time in recent months. Meanwhile, DeFi Lock-up Position exceeded $270 billion, reaching a historic high, and the market value of tokenized stocks also skyrocketed by 220%.

However, the development of the industry is not smooth sailing. Hacker attacks have caused losses of $132 million, and the usage of most dapps in the AI field has seen a double-digit decline. In terms of regulation, the United States has passed several important cryptocurrency bills, and the global regulatory framework is gradually becoming clearer.

Overall, from the strong performance of blue-chip NFTs to the record inflow of funds into Decentralized Finance, the data from July indicates that the Web3 industry is not stagnating, but rather is seeking new development directions.

Main Observations

• The average daily active wallet count in July was 22 million, a month-on-month decrease of 8%.
• Game applications account for the highest proportion ( 22.4% ), followed by AI ( 18.7% ) and NFT ( 17.5% )
• NFT volume increased by 96% to $530 million, with the average price doubling to $105.
• The DeFi Lock-up Position reached a new high of 270 billion USD on July 28, an increase of 30% month-on-month.
• The activity level of AI dapps has generally declined, but Dmail, XPIN, and ChainGPT are steadily growing.
• In July, losses due to vulnerabilities amounted to $132 million, an increase of 16% compared to June.

Overall Cooling of Dapp Activities

In July, a typical summer growth slowdown was observed, with the daily active wallet count decreasing by 8% to 22 million. The social sector experienced the largest decline, with daily active users dropping by 27% to 2.8 million. This corresponds with the characteristic of social dapps often fluctuating with hype. Currently, the InfoFi platform and the new Base dapp have become the focus, but many such communities still have strict entry barriers, limiting new user participation.

The AI sector also saw a significant decline of 14%, with daily active users dropping to 4.1 million. DeFi shrank by 6%, continuing the recent downward trend. The gaming sector performed relatively steadily, growing by 2%, while NFT remained stable.

Games continue to lead the Dapp ecosystem, accounting for 22.4% market share in July, followed by AI ( at 18.7% ) and NFT ( at 17.5% ). It is worth noting that DeFi has fallen behind NFT, reflecting a shift in user behavior and Web3 interaction priorities.

Ranking of the Most Commonly Used dapps in Web3

Solana-based DEXs continue to dominate, remaining key venues for retail activity. The gaming dapp "World of Dypians" maintains a stable user base, continuously driving engagement. Two AI Dapps have made their way to the top of the rankings, indicating sustained user interest in AI-driven Web3 experiences.

Although DeFi no longer leads in overall wallet share, it still dominates the Dapp rankings. This is because successful DeFi Dapps tend to achieve higher activity and loyalty. In contrast, the variety of Dapps in areas such as gaming, social, or NFT is richer, and user attention is more dispersed.

AI Dapp: Development, Challenges, and Future

In July, the activity of most AI Dapps declined, but Dmail Network, XPIN Network, and ChainGPT performed outstandingly with steady growth. Lightchain AI launched a mainnet specifically designed for on-chain machine learning, showcasing the future direction of decentralized AI infrastructure. Theta Network integrated Amazon chips to support use cases such as "Quakebot."

Protocols like Aethir and Render Network are implementing decentralized computing. The ASI Alliance has officially merged, aiming to build a fully decentralized AGI stack. In the gaming sector, Elympics has launched the $ELP token to achieve AI-driven "Agentic Gaming."

AI tokens such as TAO, RNDR, and AGIX are receiving significant attention, with TAO securing a $10 million investment. Researchers have unveiled A1, an AI agent capable of autonomously exploiting vulnerabilities in smart contracts, demonstrating that AI is rapidly evolving as both a tool and a risk.

In terms of regulation, the United States has passed multiple bills to provide guidance for the AI and cryptocurrency sectors, and has appointed AI and cryptocurrency commissioners, indicating the increasing importance of AI in the blockchain field.

DeFi Lock-up Position volume hits an all-time high

In July, DeFi performed strongly, with a lock-up position of ( and a TVL of ) increasing by over 30%, reaching 259 billion USD by the end of the month. On July 28, it even hit a historical high of 270 billion USD, reflecting increased market confidence, improved liquidity, and growing user demand for lending, trading, and tokenized assets.

Tokenized stocks have become a highlight, with the number of related wallets skyrocketing from 1,600 to 90,000, and the total market value increasing by 220%. This indicates that the tokenization of real assets ( RWA ) has begun to achieve scale.

Ethereum's dominant position in the DeFi space remains unchanged, with a TVL of $166 billion, far exceeding Solana's $23 billion. ETH price rose nearly 60% in July, potentially driven by favorable regulatory news. The annualized yield for staking rewards has risen to 29.4%, reflecting increased market confidence and participation.

On the Solana side, Hyperliquid has performed outstandingly, generating 35% of the chain's revenue in July, thanks to the rising demand for derivatives. Currently, Hyperliquid handles over 60% of the 24-hour perpetual contract volume, with an open interest of 15.3 billion dollars.

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

NFT Activity Surpasses Decentralized Finance

In July, the NFT market performed strongly, with activity surpassing Decentralized Finance. The volume increased by 96% to $530 million, but sales fell by 4% to $5 million. This reflects a rise in NFT prices, increasing from an average of $52 in June to $105 in July, a growth of 103%. Blue-chip collections have once again become the focus, led by whales.

Blur dominates the volume of Ethereum NFT transactions. OpenSea leads in user numbers. Zora has gained attention with its creator-first strategy.

Major brands continue to participate in the NFT space: Starbucks ends its loyalty pilot program, Nike advances digital product launches, and Louis Vuitton, Rolex, and Coca-Cola initiate pilot projects related to verification and collectibles.

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

Security vulnerabilities cause huge losses

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

• CoinDCX suffered a server breach, resulting in a loss of $44 million.
• GMX v1 vulnerability caused a loss of 42 million USD
• BigONE hot wallet suffered unauthorized access, resulting in a loss of 28 million USD.

These events remind us that Web3 security work is still ongoing. Users should carefully check smart contract permissions, avoid suspicious links, and use hardware wallets whenever possible.