The decentralized finance (DeFi) sector experienced a significant decline in the first quarter of 2025, as total value locked (TVL) dropped 27% to $156 billion according to DappRadar’s latest report. This downturn is attributed to broader market volatility and fallout from the Bybit exchange hack. Ethereum, the leading blockchain for DeFi TVL, saw a notable 37% decrease in its locked assets to reach $96 billion, while the highly-affected Sui suffered a staggering 44% decline. Other major blockchains like Solana, Tron, and Arbitrum also experienced over 30% drops in their TVL during this period. Chains with low stablecoin reserves and high token withdrawals were further impacted, leading to a ripple effect as token prices, such as Ether (ETH), saw a considerable fall of 45%, plummeting to $1,820. However, a surprising twist emerged: the newly launched Berachain defied this trend, posting significant TVL growth even during Q1 with an impressive $5.17 billion in assets locked between its February 6 launch and March 31st. Interestingly, AI and social applications saw rapid growth, witnessing a 29% rise in daily unique active wallets (DUAW) interacting with AI-powered protocols, as well as a notable 10% increase in social dapps’ user activity during the same period. While NFT trading volume dropped by 25%, led by OpenSea ($599M), Blur ($565M), and Pudgy Penguins ($177 million) and CryptoPunks ($63.6 million), showcasing their continued popularity despite accessibility concerns, GameFi also exhibited weakness in the quarter.