TL;DR
- DeFAI and DeSci narratives fell over 90%, among 2025’s worst-performing crypto sectors.
- Investors shifted to practical sectors like RWAs (+178%) and memecoins.
- 2025 acted as a natural selection, rewarding builders over speculative storytelling.
Crypto investors are closing a year defined by a loss of confidence in speculative narratives. The categories of DeFAI (decentralized finance with artificial intelligence) and DeSci (decentralized science) ended up among the worst-performing segments, despite being promoted as the next drivers of blockchain growth.
Reality turned out differently: data show declines above 90% and a sharp drop in public interest, while other areas such as memecoins, real-world assets (RWAs), stablecoins, and privacy coins managed to sustain growth.
According to Web3 analytics platforms, DeFAI is down 97%, while DeSci has fallen 91%, sharing poor performance with GameFi (-85%), modular blockchains (-92%), and Layer 2s (-81%). Mindshare tracking from Dexu.aiāwhich measures how often narratives are discussed on social mediaāshows both categories losing visibility: DeFAI holds 0.2%, and DeSci 0.1%.
DeFAI projects began with the promise of automating on-chain operations and optimizing returns through artificial intelligence. The concept attracted capital and inflated valuations based on the belief that machine learning could act as a bridge between traditional finance and the blockchain.
Meanwhile, DeSci positioned itself as a way to decentralize scientific research, democratizing funding and data exchange. Early in the year, both narratives gained traction as investors chased the illusion of real-world utility.
DeFAI and DeSci: From Promise to Decline
As the year advanced, macroeconomic challenges and market saturation exposed the fragility of both ideas. Low-quality launches multiplied, opportunistic players entered the space, and regulators tightened their oversight. The initial appeal faded as investors shifted toward execution-based and yield-driven sectors, including tokenized real-world assets, stablecoins, and privacy-focused projects.
The shift toward practical, revenue-backed narratives was no accident. Since the integration between traditional finance and blockchain began, market participants have favored projects with measurable performance and sustainable demand. In this environment, AI-driven decentralized finance and decentralized science lost relevance against tokens supported by real-world cash flows and active network usage.
On X (formerly Twitter), users commenting on the performance of 2025 narratives described the year as āharsh but necessary,ā suggesting the downturn helped flush out empty stories with no economic foundation.
What a year.
Worst performing narratives for 2025.– DeFAI -97%
( $GRIFFAIN, $LMT)– Modular -92%
( $TIA, $AVAIL, $DYM)– DeSci -91%
( $URO, $YNE, $LAKE, $CRYO, $RSC)– AI -87%
( $LAI, $SPEC, $DEAI, $AIT, $PAAL)– GameFi -85%
( $PRIME, $BEAM, $PORTAL)– Low Float Tokens -ā¦ pic.twitter.com/9IpXmZSiki
— Emperor Osmo š šÆ (@Flowslikeosmo) December 20, 2025
Crypto Economy analysts also argue that the correction has been healthy, rewarding builders over storytellers and pushing capital toward projects with real tractionāmeasured by trading volume, fees, and network activity.
The best-performing sectors include memecoins, which dominated online attention for most of the year, and RWAs, which became the top-performing narrative with +178% year-to-date returns. Stablecoins and privacy coins also gained adoption, though to a lesser extent, while high-performance L1s such as BNB and Hyperliquid helped maintain positive weighting across base-layer tokens.
Experts agree that 2025 has been a year of natural selection in the crypto market. Projects without solid fundamentals have fallen behind, while those delivering tangible results, real revenues, and continuous user activity have positioned themselves as the true winners of a cycle that rewards builders, not storytellers.
