Continuing its efforts to ensure transparency of users’ cryptoassets, Binance has introduced zk-SNARKs. It is a zero-knowledge verification method that keeps sensitive information confidential and more secure in the Proof of Reserves (PoR) verification system.
In addition to the update, four new tokens were added to the system: SHIB, DOT, CHZ, and SOL, bringing the number of verifiable assets to 13 popular tokens on Binance.
The system’s code will also be open sourced to provide greater transparency to the community. This creates a seamless process for other industry players to adopt the technology.
Binance plans to add more tokens to the PoR system in the coming weeks and continue to make the verification function more reliable, secure and private.
This is the first version of our zk-SNARKs implementation and we are looking for community feedback to further improve the system.
What is Binance’s Proof of Reserves system?
In the case of Binance Proof of Reserves, they refer to the assets that Binance holds for its users. This means that they show proof that Binance has cryptoassets that cover all of their users’ assets 1:1 with additional reserves.
When a user deposits a Bitcoin, Binance’s reserves increase by at least one Bitcoin to ensure that customers’ funds are fully secured. It is important to note that these reserves do not include Binance’s corporate crypto asset holdings, which are kept on a completely separate ledger.
In practice, this means that Binance covers all user assets 1:1, plus some margin. They have zero debt in their capital structure and have ensured that there is also an emergency fund (SAFU fund) for extreme cases.
The zk-SNARK, i.e. the zero-knowledge protocol, allows one party, the prover, to prove to another party, the verifier, that he has accurately performed certain calculations with certain inputs, subject to certain restrictions, without would reveal inputs. The calculation can be time-consuming, but with the help of the underlying mathematical mechanism, the verifier can quickly and safely evaluate the proof.
That’s it page Binance customers can verify their own crypto assets.