Grayscale Investments has made BNB the largest holding in its Smart Contract Fund, pushing both Ethereum and Solana out of the top spot. According to crypto.news, as of August 3, BNB accounted for 30.6% of the fund, followed by Ethereum at 29.47% and Solana at 29.15%. The remaining assets — Cardano at 4.88%, Hedera at 2.08%, Avalanche at 1.92%, and Sui at 1.9% — each made up less than 5%. The changes were announced on August 5, and Grayscale simultaneously rebalanced its DeFi Fund and Decentralized AI Fund during the same period.

The shift came as part of Grayscale’s regular second-quarter rebalance. The firm sold portions of its existing holdings in proportion to their weightings and used the proceeds to purchase BNB, instantly making it the fund’s single largest position upon entry. The change stands out clearly compared to the fund’s first-quarter composition. As of May 1, the fund consisted of Ethereum at 30.14%, Solana at 29.69%, Cardano at 17.96%, Avalanche at 7.69%, Hedera at 7.41%, and Sui at 7.11%, with no BNB position at all. After BNB’s addition, Ethereum and Solana’s weightings held largely steady, while smaller holdings like Cardano, Avalanche, Hedera, and Sui were sharply reduced — Cardano’s weighting alone was cut from 17.96% to 4.88%, the steepest reduction of the bunch.

It’s worth noting that this adjustment wasn’t a discretionary call by Grayscale itself, but rather the result of following the CoinDesk Smart Contract Platform Select Capped Index methodology. Multiple outlets reported that Grayscale did not frame the change as a judgment that BNB would outperform Ethereum or Solana. The index is market-cap weighted with a cap on individual asset weightings, and any asset included must meet trading and custody requirements as well as smart contract platform classification criteria set by the index provider. Grayscale noted that the fund’s composition changes daily and is published around 4 p.m. New York time; while formal reviews happen quarterly, weightings can shift continuously between reviews based on price movements, meaning the 30.6% figure should be read as a snapshot at a particular moment rather than a fixed target. Investors cannot invest directly in the index itself, and the fund’s structure differs from that of a registered exchange-traded fund. Because the product isn’t registered under the Investment Company Act of 1940, it operates under different investor protection and liquidity conditions than a standard registered fund.

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During the same rebalancing period, Grayscale’s DeFi Fund saw its Uniswap allocation trimmed. The firm sold part of its UNI position and redistributed the proceeds proportionally across the fund’s other holdings. As a result, Uniswap’s weighting fell from 35.22% in the prior quarter to 34.16%, though it remained the largest position in the fund. Ondo, a protocol built around tokenized real-world assets, saw its weighting climb sharply from 19.83% to 25.44%, overtaking Aave to become the fund’s second-largest position. Aave stood at 19.97%, Ethena at 12.19%, Curve at 4.42%, and Lido DAO at 3.82%. In the previous quarter’s review, Grayscale had dropped Aerodrome Finance and added Ethena, showing the DeFi Fund’s composition is being steadily adjusted quarter over quarter.

A similar pattern played out in the Decentralized AI Fund. Grayscale sold part of its NEAR Protocol position and reinvested the proceeds proportionally into the fund’s other assets, yet NEAR still held onto the top spot with a 31.35% weighting. Bittensor followed at 29.15%, with Render at 21.59% and Filecoin at 17.91%. NEAR and Bittensor together still make up more than 60% of the fund. Grayscale explained that both the DeFi Fund and the Smart Contract Fund are non-income-generating products; both periodically sell or distribute portions of their holdings to cover operating expenses, meaning the number of coins represented per share gradually declines over time.

This rebalance is also drawing attention because it comes as Grayscale separately pursues approval for a spot BNB ETF. A filing submitted to the SEC on June 3 listed GBNB as the intended Nasdaq ticker. That filing remains in a preliminary stage, and shares cannot be sold until it becomes effective. A subsequent amended filing named BitGo as custodian and BNY Mellon as administrator and transfer agent, though management fees and whether staking would be used were not specified. Still, it’s important to distinguish between BNB’s inclusion in the multi-asset Smart Contract Fund and the separate pursuit of GBNB ETF approval — adding BNB to a multi-asset fund does not mean the SEC has approved the standalone GBNB registration process.

Industry observers see this rebalance as a signal of how institutional interest is shifting among layer-1 blockchains. BNB overtaking Ethereum and Solana for the top weighting suggests that the index committee behind the rebalance judged the Binance-linked chain’s developer activity, fee generation, and tokenomics to be on par with the incumbent leaders. BNB Chain has indeed expanded rapidly in recent months across tokenized assets, DeFi, and enterprise blockchain use cases, and is reportedly appearing alongside Ethereum and Polygon more frequently in weekly developer activity rankings. Grayscale said it plans to continue adjusting the composition of its DeFi Fund and Smart Contract Fund according to the index methodology going forward, and that all holdings and weightings remain subject to change at any future quarterly review.