The proof-of-reserves (PoR) report of Binance, which is one of the most important and biggest cryptocurrency exchanges in the world, has been updated to include 11 new assets. MASK, ENJ, WRX, GRT, CHR, CRV, 1INCH, CVP, HFT, SSV, and DOGE are the tokens that are accounted for in the Proof of Reserves report. With this most recent upgrade, the total number of assets in Binance’s PoR system has increased to 24, with a combined worth of more than 63 billion dollars.
The Proof of Reserves (PoR) mechanism that Binance has developed is intended to give its customers with both transparency and certainty about the safekeeping of their funds. Binance claims that its Proof of Reserves (PoR) makes use of Merkle trees to add up the data that is stored on the chain. This helps to guarantee that customers’ assets are retained for them on a one-to-one basis.
The adoption of the Proof-of-Reputation (PoR) approach by other cryptocurrency exchanges comes at the same time as Binance’s Proof-of-Reputation (PoR) system is being expanded to include other coins. This comes as a direct result of the failure of FTX, which brought to light the need of more openness within the cryptocurrency sector.
Nevertheless, a number of specialists have cautioned that the PoR technique has a number of drawbacks. For instance, it does not give any information on the use of leverage, collateralization, or the proof-of-liabilities that correlate to these concepts. This information may only be disclosed if the PoR is accompanied with financial documents that detail the company’s financial position.
Binance released a significant improvement to their PoR system in February 2023, which included the incorporation of zk-SNARKs. This is an example of a zero-knowledge proof, which is a kind of proof that enables the verification of data without disclosing the data itself. According to Binance, this will result in an improvement in the level of privacy and security afforded to user data during the verification process.
In conclusion, the incorporation of 11 more tokens into Binance’s Proof-of-Residence (PoR) system is a step in the direction of improved user confidence and visibility. Nevertheless, it is essential to keep in mind that the PoR approach is not without its flaws, and users should always proceed with extreme care whenever they engage in the usage of cryptocurrency exchanges.
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