• Binance has introduced zk-SNARKs to its proof-of-reserve system in an attempt to improve user privacy and solvency verification.
• The company has also added four new crypto assets to its PoR system.
• Binance has made the code for its PoR system open-source in order to increase transparency.
Binance Introduces zk-SNARKs
Binance announced today that it had introduced zk-SNARKs to its proof-of-reserve system in an attempt to make it easier for users and other entities to verify its solvency, while also improving user privacy. Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (or zk-SNARKs) is a cryptographic tool allowing the entity that wants to prove the existence of its reserves to do so without actually disclosing what those reserves are.
Four New Crypto Assets Added
In addition, Binance has added four new crypto assets to its proof of reserve (PoR) system: Bitcoin, Ethereum, Ripple and Litecoin. This move was taken as a response to FTX’s collapse late last year, which prompted cryptocurrency exchanges across the industry to increase their efforts in proving their assets held on their platforms.
Improve Transparency with Open Source Code
As part of its effort towards increased transparency, Binance has made the code available for public viewing via open source software. This enables peers and members of the community alike can benefit from this innovative technology.
Issues with Merkle Tree System
Binance initially used only Merkle Tree when introducing PoR systems; however, this version had several issues centered around user privacy – prompting Binance’s decision for an upgrade with the idea previously mentioned by Ethereum’s Vitalik Buterin – zk-SNARKs.
Overall, it is clear that Binance is making significant strides towards increased transparency; not only through adding newly supported crypto assets but also by upgrading existing systems with zero knowledge succinct non interactive argument of knowledge (zk SNARKS).