Binance Launches Proof-of-Reserve System ‘Coming in The Near Future November 25, 2022
Binance Launches Proof-of-Reserve System ‘Coming in The Near Future<br><br>
Binance Launches Proof-of-Reserve System ‘Coming in The Near Future
The world’s largest crypto exchange firm by trading volume, Binance shared an announcement today stating that they are releasing its proof-of-reserves (PoR) system. The initiative is a step towards providing “transparency on user funds.”
The launch of the proof-of-work will first start with Bitcoin (BTC) and then with Ethereum (ETH), however, other tokens and networks will be added after that.
Binance shared their list of upcoming plans, first, to launch the next batch of PoR in the next two weeks, including additional assets. Second, to Involve third-party auditors to audit PoR results. Third, to Implement ZK-SNARKs for PoR, improving privacy and robustness, and proving the total net balance (USD) of each user is non-negative.
The release says, “When we say Proof of Reserves, we are specifically referring to those assets that we hold in custody for users. This means that we are showing evidence and proof that Binance has funds that cover all of our users’ assets 1:1, as well as some reserves.”
Binance also shared a snapshot of its own Bitcoin reserves and account balances as of 23:59 UTC on November 22, 2022.
Binance has a reserve ratio of 101%, as the company claims to own 582,485 BTC in its reserves, however, it users own a net balance of 575,742 BTC.
On the trading platform, users can now also verify their personal holdings through a provided link or against Binance’sown Merkle Tree, which is a cryptographic tool that consolidates large amounts of data into a single hash.
Users of the platform can click on the “wallet” followed by “audit”, as explained by Binance, this will generate a unique record ID. This record ID will confirm that the assets are covered and as well as confirm the users’ asset balance at the time of the audit.
Binance said in a statement, “For those who want to go a step further and independently verify their funds, they can copy the source code into a python application and cross reference it themselves.”
New exchanges now doing a proof of reserve are OKX, Binance, KuCoin, Polonix, and Huobi.
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