Binance, the biggest centralized cryptocurrency exchange by volume, has added zk-SNARKs’ zero-knowledge proof system to its proof-of-reserves (PoR) verification system to attest that funds held on the platform are backed 1:1.
Currently, the PoR system supports verifying the exchange’s reserves for 13 different crypto assets.
The exchange made this addition in response to growing concerns from investors about the safety of their funds on cryptocurrency exchanges. Binance had previously released a PoR system solely based on Merkle Tree — a data structure used in cryptography that can be used for verification.
The Binance team found the Merkle Tree-based system alone was not ideal for user privacy, so it added support for zero-knowledge proofs.
“Continuing the efforts in providing transparency on user funds, Binance is excited to introduce zk-SNARKs, a zero-knowledge verification method that keeps sensitive information private and more secure, to its proof-of-reserves (PoR) verification system,” the exchange said.
Zk-SNARK is a cryptographic tool for verifying or proving certain information without actually showing or revealing what that information is. Binance has also decided to make the zk-SNARK system open-source, allowing anyone to review the code. The team maintains that by making the system open-source, it can build greater trust on the platform.
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Source: https://www.theblock.co/post/210137/binance-deploys-zk-snarks-on-proof-of-reserves-system?utm_source=rss&utm_medium=rss