Everything Fell in Web3 Last Month — Except This Sector
Web3 Hits a Downturn Amid Global Uncertainty
The Web3 ecosystem faced significant headwinds in October 2025, with nearly every sector experiencing a decline in user activity. As the broader crypto and traditional markets grapple with economic and political instability, the decentralized world has not been immune. This challenging climate has triggered a noticeable shift in user behavior, with a clear pivot towards applications that offer tangible value and engaging experiences over short-term speculation.
According to the latest industry data, the decentralized application (dApp) market saw a distinct slowdown. The number of daily unique active wallets (dUAW) interacting with dApps fell by 3% to 16 million compared to the previous month. This follows a weak third quarter that had already seen overall dApp activity drop by over 22%, signaling a sustained cooling period across the ecosystem.
The report highlights that users are becoming more selective, carefully choosing where to invest their time and assets. “The slowdown mirrors what’s going on across the broader crypto and traditional markets,” the analysis noted, pointing to a ‘flight to quality’ as hype recedes.
The Unlikely Champion: Why Blockchain Gaming is Thriving
While most of the Web3 world contracted, one vertical didn’t just survive — it thrived. The report on how Everything Fell in Web3 Last Month — Except
In a remarkable show of resilience, blockchain gaming was the only sector to register growth in October. It captured a dominant 27.9% of all dApp activity, its highest market share of 2025. The sector successfully maintained a daily active wallet count of over 4.5 million, marking a 1% increase month-over-month. This growth is attributed to the sector’s ability to keep users hooked through continuous innovation and fresh, engaging content.
While this momentum is impressive, it’s important to view it in context. The gaming sector itself saw a slight 4.4% dip in active wallets during Q3 2025. However, the year-over-year trend remains positive, with wallet numbers climbing from 4.44 million in Q3 2024. Games like World of Dypians and Pixudi have been major drivers, attracting millions of users and demonstrating the powerful retention mechanics of modern Web3 games.
How Other Web3 Sectors Fared
DeFi and Social dApps Feel the Pressure
Other major Web3 sectors were not as fortunate. Social dApps experienced the most significant user drop-off, with active wallets declining by 7% in October. Artificial Intelligence (AI) dApps followed with a 4% decrease.
The Decentralized Finance (DeFi) space also felt the chill. Daily active wallets in DeFi fell by 5% to 2.9 million. More tellingly, the Total Value Locked (TVL) — a key metric for the sector’s health — tumbled 6.3% to $221 billion, before falling another 12% to $193 billion in early November.
The Curious Case of NFTs: Lower Activity, Higher Volume
The Non-Fungible Token (NFT) market presented a mixed but fascinating picture. While daily active wallets saw a marginal 0.5% dip to 3.2 million, the sector exploded in other areas:
- Trading Volume: Surged by an incredible 30% to reach $546 million.
- Sales Count: Hit 10.1 million individual sales, the highest monthly total recorded in 2025.
This paradox suggests that while the number of casual participants may have slightly decreased, the core community of traders became more active. With an average of 12 sales per trader in October, the data points to a consolidating market where dedicated users are driving significant volume, spurred by improved accessibility and new use cases.
What This Means for the Future of Web3
The divergence between blockchain gaming and the rest of the Web3 market offers a crucial lesson: utility and engagement are the ultimate drivers of sustainable growth. In a bear market, projects that provide genuine fun, value, and community are the ones that retain users.
Blockchain gaming’s success serves as a blueprint for other sectors. It demonstrates that by focusing on the user experience rather than pure financial speculation, dApps can build resilient ecosystems capable of weathering any market storm. As the Web3 landscape continues to mature, the platforms that prioritize innovation and lasting value will be the ones to lead the next wave of adoption.
