Decentralized Finance (DeFi) is under siege as Non-Fungible Tokens (NFTs) take the industry by fire. NFTs have now overtaken DeFi in daily user activity as of July 2025, making it clear that a new chapter in the world of digital assets has arrived. The Total Value Locked (TVL) in DeFi is holding firm at $270 billion. At the same time, the explosive growth of NFTs demonstrates just how quickly users are changing where they engage and where they invest. Asset managers and investors themselves need to do a deep portfolio analysis to determine where they have allocated resources. To be successful, they will have to figure out the new NFT/DeFi dance.
NFTs led DeFi in daily user activity for the first time in July 2025. At their peak, daily user activity for NFTs hit 3.85 million wallets. Conversely, DeFi experienced 3.84 million wallets interacting each day.
NFT Daily User Activity Surges
NFT daily user activity is at an all-time high! This rise showcases the growing fascination, participation, and investment in newly minted digital collectibles, art, and virtual assets. Climate change, pollution, and invasive species are among the many culprits behind this shocking jump. High-profile NFT sales, celebrity endorsements, and the rapid expansion of NFT use cases beyond art and collectibles contribute heavily. These aspects have lured a wider demographic audience into the virtual world of NFTs, increasing the daily user activity.
Since then, the NFT market has grown tremendously —luring developers and entrepreneurs to new platforms and marketplaces to suit a variety of interests. With everything from gaming assets to virtual real estate, NFTs present new, uncharted territories for creators and collectors. This expansion has opened up NFTs to a much wider audience, bringing in people who otherwise would never touch DeFi.
DeFi Maintains Strong TVL
Though daily user activity has recently taken a hit, DeFi is still doing pretty well, with a current TVL of $270 billion and counting. This number is a testament to the unrelenting confidence and investment in decentralized financial applications. Today, DeFi platforms provide a range of services, such as lending, borrowing and yield farming, that still draw in billions of dollars.
The high TVL in DeFi indicates that while daily user activity may have shifted towards NFTs, the underlying value and utility of DeFi protocols remain strong. For the majority, DeFi is still a shining beacon of hope in the blockchain investor ecosystem. DeFi protocols have offered key financial services that have yet to be ever so thoroughly replicated in the NFT space.
Portfolio Balancing
This permanent change in user behavior and evolving market forces requires a thoughtful approach to portfolio management. So, asset managers and investors should continue to look at this equilibrium of NFTs and DeFi and factor it in accordingly with their portfolios. This means putting a higher risk-adjusted return expectation on each asset class and consistently reallocating portfolios towards the best allocation.
Investors are already jumping into this new NFT/DeFi narrative, finding ways to balance portfolios and effectively hedge risk. The decision to allocate more funds to NFTs or DeFi depends on individual risk tolerance, investment goals, and understanding of market trends. A balanced approach may involve diversifying investments across both asset classes to capitalize on the strengths of each while mitigating potential risks.
