Binance’s enhanced Proof of Reserves (PoR) system is based on zero-knowledge proofs and improves speed while reducing computational costs for exchanges.
Binance has announced significant updates to its Proof of Reserves (PoR) system today. Their goal is to improve security, privacy, and reliability for their users. The updates will make the PoR system more efficient and profitable and will add four new tokens to the existing 13 supported tokens.
The critical change in the PoR system is the implementation of zk-SNARK, a zero-knowledge proof technology that improves the security of the system. This is the first time Binance has tested this technology. The company has stated that it will work to make it even better over time. Binance has partnered with the Polyhedra Network to ensure the implementation of zk-SNARK.
Binance opens its PoR system
Binance’s proof-of-reserve system is now open source, which means that any cryptocurrency exchange can benefit from the system and ensure its transparency. Source code, license, documentation and more are available on the Binance GitHub page.
With this latest move, Binance is implementing a new transparency standard. Exchanges will no longer need to spend money developing their solutions or pay for third-party services like the zero-knowledge PoR system launched by Hacken in 2022.
Binance partners with Polyhedra Network to improve its POR system
In it official blog post, Binance delves into the implementation of zk-SNARK and how it improves the current PoR system. The article also explains the concept of zero-knowledge proofs and how they improve fallback proof systems. An Academy article with a more detailed explanation will also be available.
With PoR system updates, Binance users can verify that the exchange fully supports their funds. External third-party organizations will also be able to verify the entire reservation for the exchange. However, the information provided is not real time but based on snapshots.
Polyhedra Network has been instrumental in ensuring the data integrity of the PoR system. According to PolyhedraZK, the security of zero-knowledge proofs is ensured by cryptographic assumptions that are computationally difficult to break. The cryptographic tools used in the PoR system have been used in many existing systems and are considered secure.