Exchange News- This method enables Binance to demonstrate the status of its assets.
- The upgrade should greatly increase the safety and openness of the verification procedure.
Binance, a cryptocurrency exchange, stated on February 10 that it will be using zk-SNARKs. As part of its proof-of-reserves verification system. A cutting-edge technology that the company claims would enable it to validate its reserves in a more secure, transparent way.
Proof-of-reserve verification became an important part of the cryptocurrency market after the FTX collapsed in 2022. Because it proved that exchanges really had the assets they claimed to have. Binance was an early adopter of the system. And it was one of the few that relied on classic cryptography at first. However, it has been recently upgraded to incorporate zk-SNARKs. Which should greatly increase the safety and openness of the verification procedure.
More Privacy and Security
According to Binance CEO Changpeng Zhao, “more privacy and security” would be offered by the zk-SNARKs upgrade, which was previously proposed by Ethereum founder Vitalik Buterin.
Zhao stated:
“This is an important step forward in PoR technology. Anyone in the industry can take advantage of our open-source PoR system so that we can provide all users with the assurance they need to feel SAFU.”
This method enables Binance to demonstrate the status of its assets while keeping sensitive information private, it is seen to be a superior approach for confirming the exchange’s reserves.
In the wake of the FTX crisis, Binance, along with other major exchanges including Crypto.com, Bybit, and OKX, introduced a Merkle-tree-based proof-of-reserves mechanism to boost transparency. In spite of these efforts, there are still many who question the system’s reliability and refuse to accept it at face value.
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Source: https://thenewscrypto.com/binance-incorporates-zk-snarks-into-proof-of-reserve-verification-system/