2025 Crypto Market Shifts: DeFAI and DeSci Falter as Real-World Demand Drives RWA Growth

In 2025, DeFAI and DeSci narratives fade while real-world asset tokens (RWA) and demand-driven sectors lead the market, signaling a move from hype to practical use.

Rich by Coin

2025-12-22

AI and decentralized finance (DeFAI), and decentralized science (DeSci) were named among the year’s worst narratives in the 2025 digital asset market. Inflated expectations clashed with reality, causing investors to suffer sizable losses. Dexu.ai data show DeFAI tokens down 97% and DeSci down 91% since the start of the year. During the same period, GameFi fell 85%, modular blockchains 92%, and Layer2 81%.

Both narratives also underperformed in market mindshare. DeFAI rose with the vision that AI would automate profitability and trading, but the proliferation of low-quality projects and regulatory uncertainty eroded trust. Experts said this year the market distinguished real builders from storytellers. While narrative-driven projects collapsed, sectors with real revenue models thrived.

The leading sector this year was real-world asset tokens (RWA), up 178% from the start of the year. Meme coins and privacy coins remained strong, and demand for stablecoins also increased. High-performance Layer1 chains like BNB and Hyperliquid delivered positive returns, while Solana, Aptos, and Sui faced ongoing pressure. Investors described the year as brutal but a necessary cleanup.

One analyst said the year rewarded execution over storytelling, as speculative narratives faded and the market moved toward real-demand.

In 2025, the crypto market saw DeFAI and DeSci named among the year’s worst narratives as inflated promises clashed with reality. Dexu.ai data show DeFAI tokens down 97% and DeSci down 91% since the start of the year, while GameFi, modular blockchains, and Layer2 also retreated. This reflects a broader sentiment where speculative narratives failed to translate into sustainable demand. Meanwhile, sectors with real revenue potential outperformed, led by real-world asset tokens (RWA), which surged 178% from the year’s start.

Meme coins and privacy coins remained competitive, and stablecoins continued to gain traction as demand shifted toward pragmatic use cases. High-performance Layer1 chains such as BNB and Hyperliquid delivered positive returns, though Solana, Aptos, and Sui faced ongoing pressure. Investors described the year as a brutal but necessary cleanup, with the market rewarding execution over storytelling. Experts say 2025 marks a shift from speculative narratives to real demand, as builders and regulators help differentiate quality projects.