Major crypto entities are sensitive to what is currently happening with the bear market and FTX bankruptcy. Last week we learned that the Binance exchange has launched a fund to revitalize the sector. Subsequently, Bybit announced the launch of a support fund for institutional investors. It is the turn of Coinbase, the US crypto exchange services giant, to announce similar news.
A solution to encourage crypto players to prove their reserves
On November 25, the Coinbase team published a blog post to announce a grant program. This is a solution for promoting transparency in the crypto space and supply chain accounting. The amount of the subsidy program is $500,000. Coinbase has suggested that it wants this program to encourage other players to follow suit by providing evidence of their reservations.
He has declared : “ As a listed company, we already prove our reserves with our audited annual accounts. We are also exploring several innovative ways to prove reserves using more crypto-native methods. We’re announcing a $500,000 developer grant program to encourage others to do the same“.
Coinbase explained that the fund is aiming for it“ assist individuals or teams in advancing the state of the art of on-chain accounting, privacy preservation techniques related to proof of assets or liabilities, including the application of no-knowledge or closely related technologies“.
Proof of reserve, to reassure investors
According to Coinbase, crypto companies should reassure investors after the failure of the FTX exchange. To do this, they must show the latter that they can withdraw their funds from the CEX at any time. The exchange added: “Millions of people have recently placed their money and trust in FTX. But they were abused. This should never have happened“.
In this regard, Coinbase explains that it is proof of reserves an appropriate way to ensure that a platform is solvent. It would allow”verify if a platform has enough assets to match its users’ deposits“.”So if a user wants to withdraw their assets, they know they will get them back.», Specifies the crypto exchange.
Coinbase claims that there is “several complementary ways to prove a crypto exchange’s reserves and liabilitiesHe suggests that digital asset exchanges have both traditional methods and more sophisticated ways of proving their reserves.
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Far from dampening my enthusiasm, a failed investment in a cryptocurrency in 2017 only added to my enthusiasm. I therefore decided to study and understand the blockchain and its many applications and to pass on information about this ecosystem with my pen.