April 12, 2024

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These days many consumers have become skeptical about the stability of cryptocurrency enterprises on account of their lack of liquidity.

Therefore, cryptocurrency firms have started to issue Proof of Reserve reports to inform their consumers about the latest liquidity status. Binance is among the firms that have endorsed this idea and issued a Proof of Reserve protocol.

Recently, the firm has adopted a Zk- PoR, which is a Zero Knowledge PoR verification mechanism. The new update is called zk-SNARK, and it will work to check and verify the total funds that are held on the cryptocurrency exchange.

This system will assure the stakeholders that the funds on the platform are backed 1:1 without revealing the personal information of the account holders.

The unfortunate incident and shocking revelations to come out of the cryptocurrency markets have created an air of suspicion among investors.

To this end, many cryptocurrency enterprises like Binance are working on making the most reliable and trustworthy version of the PoR report. The latest module adopted by Binance for PoR will check the statistics for 13 listed currencies.

There has been growing pressure from investors about the possible instability of the cryptocurrency exchange. The firm received considerable backlash on the previous model of PoR that depended solely on Merkle Tree. Merkle Tree can be used to verify the PoR data based on cryptographic signature verification.

New Upgrade will Increase Transparency

Binance has recently told the media that the firm has been working on ensuring transparency for its users. The representative of the exchange claimed that ZK-SNARKs would not only improve the quality of previous transparency concerns but also ensure that the sensitive information concerning the consumers remains protected.

Also Read:  Chainlink Presents “Proof of Reserves” to Address Issues in the Crypto Sector

Zk-SNARK uses cryptography to verify the data that such as PoR statistics, without needing unrelated information, such as personal credentials. Binance has shared an aim to make Zk-SNARKs open-sourced project so that everyone can use or view the code.

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