Binance Releases Proof of Reserves System

Binance-Releases-Proof-of-Reserves-System
  • Binance revealed proof of reserves system late on Friday 25th.
  • This PoR system features Bitcoin at the first stage.
  • Binance has 575,742.4228 $BTC in customer net balance and 582,485.9302 $BTC in on-chain reserve.

In order to demonstrate that the exchange is stable and financially sound, Binance made its proof-of-reserves system available, beginning with bitcoin.

The first batch of audit results’ snapshot time is November 22 at 23:59 UTC. The findings revealed that Binance has 575,742.4228 $BTC in customer net balance and 582,485.9302 $BTC in on-chain reserve. Reserve coverage is 101%.

According to Binance, the next round of PoR, which will include new assets, will go live in the next two weeks.

It also wants to involve third-party auditors to check the proof-of-reserves system and to implement zero-knowledge proof technology. This is in a hedge to provide cryptographic proof of its claims while protecting user privacy.

According to their blog post, the Implementation of ZK-SNARKs for PoR is underway. This is meant to improve privacy and robustness as well as prove the total net balance (USD) of each user is non-negative

This occurs only a few weeks after a rival exchange, FTX, shut down. Allegedly, they exchanged user funds for other, less liquid tokens, causing a liquidity crisis in the process. The objective of Binance is to demonstrate that it holds the assets of its users in the same tokens that they have deposited.

This is a great move by the now-largest cryptocurrency exchange according to the cryptocurrency community. Added by a Twitter user, regular transparency from CEXs about proof of reserves is one of the silver linings to come out of the FTX debacle.

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