The largest crypto exchange in the world, with the help of its new Proof-of-Reserve system, intends to regularly prove to its users that nothing threatens their assets.
Binance has announced the launch of its reserve confirmation system, which the company says is the next step towards greater transparency and confidence in the trading platform ecosystem. At first, the PoR system will work with bitcoins – the crypto exchange will add other cryptocurrencies and tokens in the next few weeks.
“Our reserve confirmation system will only affect assets that are held for users. This means that we intend to prove to our clients that Binance has funds that cover all their assets 1:1, and there is still a reserve,” the announcement says.
The crypto exchange published data on account balances and own reserves of bitcoins as of November 22. The exchange has 582,485 BTC in reserves and a net user balance of 575,742 BTC. This means that the reserve ratio is on the order of 101%.
Users will reportedly be able to independently verify personal assets on the platform using the Binance Merkle Tree tool, which combines large amounts of data into a single hash. In addition, the exchange plans to engage third-party auditors to test the new system and implement zero-knowledge proof technology.
Earlier, the crypto exchange announced plans to launch a special fund to help crypto companies that faced a liquidity crisis two weeks ago due to the default of the FTX crypto exchange.
Source: Bits
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