Sat Nov 26, 2022 ▪ 9:00 PM ▪
min read – through
The FTX fiasco is forcing crypto platforms to be more careful. They will also have to reassure investors who are increasingly afraid for their money. Just over two weeks after Sam Bankman-Fried’s empire crashed, Binance is taking drastic measures for transparency. Indeed, the largest crypto exchange in the world has committed to developing a proof of reserve (PoR) and has just published details.
Binance realizes its commitment to Proof of Reserves (PoR) development
After the FTX disaster, Binance had decided to do this fully engaged in the development of reserve certificates. She just made public a reserve note based on the mekdle tree. The crypto platform explains on its official website how it is possible to use this mechanism to check your balance. It must be said that everything is not perfect yet, because the only token we currently use for verifications is bitcoin (BTC). But this is just a postponement as the exchange adds that it will integrate new coins in the near future.
With the reserve certificate, Binance wants to emphasize the transparency that is often lacking in this industry. The platform even plans to make updates in which it could including external auditors to check its results. That’s not all, because it also plans to implement ZK SNARK in PoR methods.
Binance has the merit of being one of the first exchanges to participate in PoR after the SBF debacle. In the aftermath, he had made his wallet addresses and on-chain activities public. Several other crypto exchanges have followed suit. References are made to Bitfinex, OKX, Crypto.com and KuCoin to name a few. Not all platforms that lend themselves to PoR necessarily receive positive feedback. This is the case of Gate.io and Huobi, which received barrages of criticism as information about their balances included borrowed funds. Other platforms like Grayscale investments would also like to publish their addresses like Binance, but they are afraid of security issues.
Chainlink Labs offers its PoR audit services to remedy the security problems identified by the platforms. In the same vein, CoinMarketCap, the market tracker, has just announced the introduction of a new feature. It will track all platforms that make their information public.
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Cédrick Aimé, graduate student in finance law and experienced SEO web editor, is passionate about cryptocurrencies, trading, etc. He naturally participates in the daily blockchain revolution for better democratization of DeFi thanks to his articles.