• Binance has introduced zk-SNARKs to its proof-of-reserve system in an attempt to make it easier for users and other entities to verify its solvency.
• This was done as a result of the collapse of FTX in late 2022, leading many cryptocurrency exchanges rushing to prove the assets held on their platforms.
• Binance has made this PoR system open source in order to increase user privacy and transparency of its reserves.
Binance Improves Proof-of-Reserve System
Binance announced today that they have upgraded their proof-of-reserve system with zk-SNARKs, a cryptographic tool allowing them to prove the existence of their reserves without actually disclosing what those reserves are. This upgrade comes after the loud collapse of FTX in late 2022, causing many cryptocurrency exchanges to rush to prove their assets held on their platform. The company found several issues with employing only the Merkle Tree system and decided that zk-SNARKs was a better option for verifying solvency and privacy concerns. Additionally, they have added four new crypto assets to their PoR system.
What Is ZK-SNARK?
Zero Knowledge Succinct Non-Interactive Argument of Knowledge (zk‑SNARK) is a cryptographic tool used by Binance which allows them to prove the existence of their reserves without actually revealing what those reserves are. This tool makes it easier for users or other entities when it comes to verifying Binance’s solvency.
Open Source Code
In order to increase transparency among users, Binance has made this PoR system open source so that industry peers and the community can benefit from this innovative technology. This will allow anyone using the platform or interested in doing so, access into how it works and help ensure trustworthiness among customers when it comes to funds being held on the platform safely.
The introduction of zk‑SNARKS helps solve user privacy issues associated with only employing Merkle Tree while also allowing users more control over how much information they provide when verifying their reserve holdings with third parties if desired. It also improves data accuracy since no actual data needs be revealed before proving solvency is verified by third parties or entities who wish access into such information concerning Biance’s finances or holdings..
New Crypto Assets Added
In addition to introducing zk‑SNARKS into its PoR system, Biance has added four new crypto assets which can be used on its platform as well as verified through its proof-of reserve process through third party verification if needed.
Comments are disabled