Binance launches open-source proof-of-reserves system
The improved proof-of-reserves (PoR) system by Binance is based on zero-knowledge proofs and improves on speed while reducing computational costs for exchanges.
Binance has announced significant updates to its proof-of-Reserves (PoR) system today. It aims to improve security, privacy, and reliability for its users. The updates will make the PoR system more efficient and cost-effective and add four new tokens to the existing 13 supported tokens.
The critical change in the PoR system is the implementation of zk-SNARK, a zero-knowledge-proof technology that improves the system’s security. This marks the first time that Binance has tried this technology. The company has stated that it will work to make it even better over time. Binance has partnered with Polyhedra Network to ensure the implementation of zk-SNARK.
Binance open sources its PoR system
Binance’s proof-of-reserve system is now open-source, meaning that any crypto exchange can benefit from the system and ensure its transparency. The source code, licensing, documentation, and more are available on the Binance GitHub page.
With this latest move, Binance is implementing a new standard for transparency. Exchanges will no longer need to spend money developing their solutions or paying for third-party services like the zero-knowledge PoR system launched by Hacken in 2022
Binance teams up with Polyhedra Network to improve its POR system
In the official blog post, Binance delves into the implementation of zk-SNARK and how it improves the current PoR system. The article also explains the concept of zero-knowledge proofs and how they improve proof of reserve systems. An Academy article with a more in-depth explanation will also be made available.
With the updates to the PoR system, Binance users can verify that the exchange fully backs their funds. External third-party organizations will also be able to verify the entire reserve for the exchange. However, the information provided is not real-time but is based on snapshots.
Polyhedra Network has been instrumental in ensuring the data integrity of the PoR system. According to PolyhedraZK, the security of zero-knowledge proofs is guaranteed by cryptographic assumptions that are computationally hard to break. The cryptographic tools used in the PoR system have been used in many existing systems and are considered secure.
