Binance Releases Proof of Reserve System
Crypto currency exchange Binance has released the proof of reserve system called Proof of Reserve (PoR) with its new features.
With the collapse of the popular crypto currency exchange FTX, a new dimension has been passed in the crypto industry. In the new dimension launched with Binance, the transparent sharing of reserves by exchanges has come to the fore. Binance, which wants to keep the crypto market afloat and build a reliable sector, continues to support the idea it has come up with. The company, which is called the world’s largest crypto currency exchange, has published a new proof of reserve system called Proof of Reserve.
Binance Has Taken Another Step For User Transparency
Binance has announced a new Proof of Reserve system, Proof of Reserve (PoR). The company, which wants to provide transparency in user funds and build a reliable market, introduced its new system using the Merkle Tree data structure.
Binance has taken another step revealing its transparent stance on user funds. This new step is also an update using the Merkle Tree data structure to prove the Proof of Reserves and BTC balances for BTC. The first version of the feature, which provides verification for ETH, USDT, USDC, BUSD and BNB, is expected to arrive soon.
The popular crypto exchange is also working on obtaining the services of an independent third-party controller to verify the financial details of the system.
The stock exchange also shared the results of the first audit of the POR. Accordingly, the image taken on November 22 contains 582,485 BTC. In addition, 575,742 BTC was displayed as the customer’s net balance.
Changpeng Zhao (CZ), CEO of Binance, said the following about the issue;
“Given the recent events, it is understandable that the community expects more from crypto exchanges, especially much more than expected from traditional financial institutions. That is why we are pleased to introduce this new feature so that our users can verify their funds. Binance’s user community is much larger compared to the next largest exchange. That’s why this is a huge process… so it will take a few weeks to develop the data for the vast majority of the assets that are under our trust. We are working to roll out the next update as quickly as possible to meet the expectations of our community.”
Reserve Proof and Verification
The new proof of reserves system is designed to show that Binance, as a depositary, protects all customer funds along with reserves. Thus, when a user deposits a Bitcoin, Binance’s reserves will also be able to increase by at least one Bitcoin to ensure that user funds are fully backed. In addition, users will be able to control the system and see Binance’s reserve ratio, as well as Binance’s Proof of Reserve, which shows customer responsibilities.
In addition to all this, users will be able to control their transactions with the Merkle Tree structure. Two methods have been identified for this. The first of these methods will be that users will be able to check their BTC funds through Merkle Tree with a few simple steps. After logging in from the official site of Binance, users who connect wallets will be able to perform a check-up operation. In the other method, users will be able to copy the source code into a python application to obtain their own opposing references.
The popular crypto exchange Binance plans to introduce zk-SNARKs in the coming weeks. This tool will October provide additional privacy and simplicity benefits to the proof of reserve. Thanks to the tool, it is aimed to provide users with proof of presence with full efficiency. zk-SNARK will have proved that the total net balance of each user is not negative
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