Originally two weeks after Binance committed to developing a proof-of-reserve (PoR) mechanism. in response to the FTX liquidity and bankruptcy fiasco, it published his official answer.
In an announcement on the Binance website, the exchange outlined how users can use the mechanism to verify their holdings. Currently, it is the only token available to verify through The Merkle treesystem based on Bitcoin (BTC), although the announcement says more coins will be added in the coming weeks.
It also highlighted upcoming transparency updates, which include, among other things, the involvement of third-party auditors in auditing its PoR results and the implementation of ZK-SNARKs in PoR methods.
Days after Binance announced its PoR intention, it released the details to the public wallet addresses and on-chain activity.
Binance CEO Changpeng “CZ” Zhao tweeted about the latest update. Naturally, the Twitter community responded, with many commenting positively on the transparency effort.
This is a great initiative. Perhaps a separate page for Proof of Reserves could be planned in the future where users could see all the holdings of the exchange (updated daily).
— chief (@satn) November 25, 2022
Binance was one of the first after FTX to start the trend of releasing proof assets. Bybit released its reserve wallet addresses on November 16, a week after the initial incident, along with other major exchanges such as Bitfinex, OKX, KuCoin and Crypto.com.
Both Huobi and Gate.io came under fire after publishing their information, which included borrowed funds. Cryptocurrency investment product provider Grayscale Investments said that ws hesitant to release wallet address due to safety concerns.
On November 10, Chainlink Labs offered PoR audit services to exchanges across the space as a solution to the trust issues that are beginning to emerge with centralized exchanges.
CoinMarketCap market tracking shared on November 22 that he added a new featurewhich is the PoR tracker for the exchanges that published the information.