On February 10 cryptocurrency exchange Binance announced that it will use zk-SNARKs as a part of its proof-of-reserves verification system. The company believes that this new technology will help to validate its reserves in a more secure, officiant and transparent way.
Binance Integrates zk-SNARKs Into Proof-of-Reserve Verification System
Proof-of-reserve verification became an important part of the cryptocurrency market after the collapse of FTX in 2022. It is worth noting that Binance was an early adopter of the system and it was one of the few that relied on classic cryptography at first. That’s why it is not surprising that it has been recently upgraded to use zk-SNARKs that probably will increase the safety of the verification procedure.
The Appointment
According to CEO Changpeng Zhao, the new upgrade will bring “more privacy and security”. He specifically appointed:
“This is an important step forward in PoR technology. Anyone in the industry can take advantage of our open-source PoR system so that we can provide all users with the assurance they need to feel SAFU.”
This upgrade will enable the exchange to demonstrate the status of its assets and, which is not less important, keep information private at the same time.
Proof-of-Reserve Verification
After the FTX crisis the exchange along with other major exchanges including such big companies as Crypto.com, Bybit, and OKX, introduced a Merkle-tree-based proof-of-reserves mechanism to boost transparency. In spite of these efforts, many users are still questioning system’s reliability and refuse to accept it at face value.
Summary
- This method enables Binance to demonstrate the status of its assets.
- The upgrade will increase the safety and openness of the verification procedure.
Source
www.thenewscrypto.com
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