Defining a new monad in haskell raises no instance for Applicative

This is the Applicative Monad Proposal (AMP). Now whenever you declare something as Monad, you also have to declare it as Applicative (and therefore Functor). Mathematically speaking, every monad is an applicative functor, so this makes sense.

You can do the following to remove the error:

instance Functor Wrap where
  fmap f (Wrap x) = Wrap (f x)

instance Applicative Wrap where
  pure = Wrap
  Wrap f <*> Wrap x = Wrap (f x)

https://wiki.haskell.org/Functor-Applicative-Monad_Proposal

Edit: Maybe I should point out more clearly that this is a recent thing? The code you posted used to work before, but with recent versions of GHC you'll get an error. It's a breaking change.

Edit: The following declarations should work for any monad:

import Control.Applicative -- Otherwise you can't do the Applicative instance.
import Control.Monad (liftM, ap)

instance Functor ??? where
  fmap = liftM

instance Applicative ??? where
  pure  = return
  (<*>) = ap

Depending on the monad in question, there may be more efficient implementations possible, but this is a simple starting point.

The most normalized and unobtrusive answer is :-

as Monad is dependent upon Applicative

class Applicative m => Monad m where ...

and Applicative is dependent upon Functor

class Functor f => Applicative f where ...

we need the instance definitions

> instance Functor Wrapped where
>     fmap = liftM

and

> instance Applicative Wrapped where
>     pure = return
>     (<*>) = ap