Binance’s new proof of reserve system brings transparency to the NFT market
Binance makes its proof of reserve feature open-source. The latest move by the exchange is a remarkable move towards transparency in the NFT and wider crypto market.
Binance updates PoR system
Binance, a top cryptocurrency exchange, unveiled updates to its Proof of Reserve system, with the goal of increasing security, privacy, and reliability for its users. These upgrades will make the system more streamlined and cost-effective while also adding four new tokens to the existing 13 supported tokens.
At the core of these updates is the integration of zk-SNARK, a zero-knowledge-proof technology that enhances the security of the system. This marks the first time that Binance is utilizing this technology, and the company has indicated that it will continuously work to improve it. Binance has teamed up with Polyhedra Network to ensure seamless integration of zk-SNARK.
Binance is a major player in the NFT industry. Its non-fungible token marketplace is one of the largest and most popular, and the Binance Smart Chain (BSC) is house to some of the biggest collections and projects. Its efforts to be one of the most relevant players in what has become one of the most revolutionary asset classes in the world of finance have paid off. Binance has fostered one of the most active communities in the NFT world.
Users and third parties can now verify personal and exchange reserves
In a blog post, Binance provided details about the integration of zk-SNARK and its impact on the current Proof of Reserve system. For those seeking a more comprehensive understanding, a separate article will be made available on the Binance Academy.
With the updates to its Proof of Reserve system, Binance users can now confirm that their funds are fully supported by the exchange. Additionally, external third-party organizations will have the ability to verify the entire reserve of the exchange. It is important to note that the information provided is not live and is based on snapshots.
According to Binance, this update also improves the frequency of snapshots of funds while reducing the computational cost substantially. This means exchanges will have smaller costs while providing more up-to-date reserves data.
Binance makes PoR system available to wider ecosystem
Binance has made its Proof of Reserve system open-source, making it accessible for any cryptocurrency exchange to use and ensure transparency. The source code, licensing information, documentation, and other related materials are readily available on the Binance GitHub page.
This latest step by Binance could potentially set a new standard for transparency in the cryptocurrency industry. Exchanges will no longer have to allocate resources to create their own solutions or pay for third-party services. Binance’s gift to the centralized exchange ecosystem comes at a time when transparency and regulatory oversight have become paramount for users.
Following the demise of FTX, which gravely impacted the entire crypto industry, security, transparency, and compliance have become a must for cryptocurrency users. As Binance sets a new standard for cryptocurrency exchanges, there are no longer any viable excuses for exchanges to keep their users in the dark regarding the management of crypto reserves.f
Cypto’s future is set out to be one where trust is no longer required. Full transparency means zero trust. While Proof of Reserves solutions are not new, they always come at a cost, either in development or in acquiring a third-party service like the one provided Hacken, a crypto-security firm, and others.
