Binance, the world’s largest cryptocurrency exchange by trading volume, has added 11 new tokens to its Proof of Reserves (PoR) report, bringing the total number of cryptocurrencies verifiable through the system to 24. The addition of MASK, ENJ, WRX, GRT, CHR, CRV, 1INCH, CVP, HFT, SSV, and DOGE allows users to verify the amount of funds on the exchange across a wider range of assets, with the total amount now exceeding $63 billion.
Binance was among the first platforms to share its Proof of Reserves report, which allows users to verify the amount of funds held by an exchange. Initially, Binance shared a list of the tokens it holds, but noted that it was “not a complete set of data” and promised to share further details in an upcoming full audit report. In December, Binance shared its PoR report audited by Mazars, which claimed that Binance’s bitcoin reserves had a 101% collateralization ratio. However, some experts found holes in the audit, leading to a surge in withdrawals as users grew concerned about the platform’s reliability.
To address these concerns, Binance incorporated zk-SNARKs into its PoR system earlier this year, affirming that funds held on the platform are backed 1:1 while preserving the privacy of sensitive user data. With the addition of 11 new tokens to its PoR system, Binance aims to increase transparency and instill trust among users.
Other cryptocurrency platforms that have completed their Proof of Reserves audits include Kraken, Crypto.com, Bitmex, Coinfloor, Gate.io, HBTC, and most recently, India-based WazirX. However, some industry veterans argue that Proof of Reserves alone is not enough to thoroughly verify the financial health of a company. This is because the practice does not reveal the overall balance sheet and liabilities of a platform, which makes it hard for users to fully verify an exchange’s financial health.
In light of this, some platforms have taken additional steps to increase transparency. For example, Kraken has published a monthly balance sheet to provide users with more detailed information on its finances. Meanwhile, Coinbase has announced plans to publish quarterly financial statements and has undergone a public listing process, which requires additional transparency.
In conclusion, Binance’s addition of 11 new tokens to its Proof of Reserves report is a step towards greater transparency and trust in the cryptocurrency industry. While some experts argue that Proof of Reserves alone is not enough to thoroughly verify the financial health of a platform, it is a positive step towards greater transparency. As the cryptocurrency industry continues to mature, it is likely that we will see more platforms take additional steps to increase transparency and instill trust among users.