Cryptocurrencies’ total market capitalization bounced from $860 billion on June 30 to the current $1.03 trillion, a 20.6% relief in five weeks. Ether (ETH) might have been the absolute leader among the largest smart contract chains, but BNB managed to gain 39% over that period.

BNB token’s year-to-date performance remains negative by 43%, but the current $49.5 billion market capitalization ranks it the third largest, excluding stablecoins. Furthermore, the leading decentralized application (DApp) is PancakeSwap — 843,630 active addresses in the past seven days — which runs on BNB Chain.

The token serves primarily as a utility asset within the Binance exchange ecosystem, enabling traders to earn discounts or participate in token offers. So, technically, the BNB token does not give ownership rights or dividends to any Binance-owned company or service.

However, according to Bloomberg, the United States Securities and Exchange Commission (SEC) is investigating whether the initial coin offering (ICO) of BNB tokens in 2017 consisted of a sale of unregistered securities. A digital asset may fall under the SEC’s scrutiny if buyers intend to profit from the efforts of a company or project funded by the capital raise.

To understand whether BNB's 39% rally in five weeks is justified, investors should analyze network use, including smart contract deposits, active users and decentralized applications adoption.

BNB Chain‘s primary decentralized application metric started to display weakness earlier in May as the network‘s total value locked (TVL) dropped below 24 million BNB.

The chart above shows how BNB Chain‘s DApp deposits saw a 28% decline in three months as the indicator reached its lowest level since April 2021. As a comparison,