Binance Aims to Improve Proof-of-Reserve System With zk-SNARKs

Binance said earlier today it had introduced zk-SNARKs to its proof-of-reserve system in an attempt to make it easier for users and other entities to verify its solvency.

Additionally, the exchange has added four new crypto assets to its PoR system.

• Ever since the loud collapse of FTX in late 2022, cryptocurrency exchanges have rushed to prove the assets held on their platforms. Binance was among the first to introduce such a feature, initially utilizing only Merkle Tree.
• However, the company said in its latest blog post that this version had a few issues, mainly centered around user privacy.
• As such, Binance has decided to upgrade its PoR system with an idea previously mentioned by Ethereum’s Vitalik Buterin – zk-SNARKs.
• Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (or zk-SNARKs) is a cryptographic tool allowing the entity that wants to prove the existence of its reserves to do so without actually disclosing what those reserves are.
• Binance added that it has made its PoR system open-source in an attempt to increase the transparency of its reserves.

We are making the code for #Binance’s PoR system open-source because we want to continue to provide more transparency for our users, so that industry peers and the community can benefit from this innovative technology.

— Binance (@binance) February 10, 2023

• The exchange’s PoR system now supports 13 crypto assets in total, as it added four with the implementation of zk-SNARKs.