Binance publishes official Merkle Tree-based proof-of-reserves

Two weeks aft Binance initially pledged to make a proof-of-reserve (PoR) mechanics successful effect to the FTX liquidity and bankruptcy fiasco, it published its authoritative response.

In an announcement connected the Binance website, the speech outlined however users tin usage the mechanics to verify its holdings. Currently, the lone token disposable to verify done the Merkle Tree-based strategy is Bitcoin (BTC), though the announcement says further coins volition beryllium added successful the coming weeks.

It besides highlighted upcoming transparency updates which see the engagement of third-party auditors to audit its PoR results and implementation of ZK-SNARKs successful its PoR methods, among others.

Days aft Binance announced its volition for PoR, it released the nationalist details of its wallet addresses and on-chain activity.

Binance CEO Changpeng “CZ” Zhao tweeted astir the latest update. Naturally, the Twitter assemblage responded and galore with affirmative comments towards the transparency efforts.

This is simply a large initiative. Perhaps a stand-alone leafage for Proof of Reserves wherever users tin spot each the speech holdings (updated daily) could beryllium connected the roadmap for the future.

— Chief (@satn) November 25, 2022

However, immoderate inactive had questions arsenic to whether Binance auditing itself is the astir businesslike mode of being transparent.

Related: Proof-of-reserves: Can reserve audits debar different FTX-like moment?

Binance was 1 of the archetypal pursuing the FTX to commencement a inclination of releasing impervious of funds. Bybit released its reserve wallet addresses connected Nov. 16, a week aft the archetypal incident, on with different large exchanges specified arsenic Bitfinex, OKX, KuCoin and Crypto.com.

Both Huobi and Gate.io came under occurrence aft publicizing their information which included loaned funds. The cryptocurrency concern merchandise supplier Grayscale Investments said it is hesitant to merchandise wallet addresses owed to information concerns.

On Nov. 10 Chainlink Labs offered PoR auditing services to exchanges crossed the space, arsenic a solution to spot issues starting to popular up for centralized exchanges.

Market tracker CoinMarkCap shared connected Nov. 22 that it added a caller feature, which is simply a PoR tracker for exchanges who person publicized the information.