Two days after Binance initially promised to build up an evidence-of-reserve (PoR) mechanism in reaction to the FTX liquidity and personal bankruptcy fiasco, it printed its official response.
Within an announcement around the Binance website, the exchange outlined how users may use the mechanism to ensure its holdings. Presently, the only real token open to verify with the Merkle Tree-based product is Bitcoin (BTC), although the announcement states additional coins will be included the approaching days.
Additionally, it highlighted approaching transparency updates, including the participation of third-party auditors to audit its PoR results and also the implementation of ZK-SNARKs in the PoR methods, amongst others.
Days after Binance announced its intention for PoR, it released the general public details of their wallet addresses as well as on-chain activity.
Binance Chief executive officer Changpeng “CZ” Zhao tweeted concerning the latest update. Naturally, the Twitter community responded and lots of with positive comments toward the transparency efforts.
A great initiative. Possibly a stand-alone page for Evidence of Reserves where users can easily see all of the exchange holdings (updated daily) might be around the roadmap for future years.
— Chief (@satn) November 25, 2022
Related: Proof-of-reserves: Can reserve audits avoid another FTX-like moment?
Binance was among the first following a FTX to begin a pattern of releasing evidence of funds. Bybit released its reserve wallet addresses on November. 16, per week following the initial incident, as well as other major exchanges, for example Bitfinex, OKX, KuCoin and Crypto.com.
Both Huobi and Gate.io received fire after publicizing their information, which incorporated loaned funds. Cryptocurrency investment product provider Grayscale Investments stated it ws reluctant to produce wallet addresses because of security concerns.
On November. 10 Chainlink Labs offered PoR auditing services to exchanges over the space as a strategy to trust issues beginning to appear for centralized exchanges.
Market tracker CoinMarketCap shared on November. 22 it had added a brand new feature, that is a PoR tracker for exchanges which have publicized the data.
