Crypto behemoth Binance has deployed zk-SNARKs to its proof-of-reserves [PoR] verification system. This also comes with the addition of four new tokens- Shiba Inu [SHIB], Solana [SOL], Poladot [DOT], and Chiliz [CHZ], bringing the total number of verifiable assets to 13 popular tokens on Binance.
Binance plans to add more tokens to the PoR system in the weeks ahead and will continue to make the verification function more reliable, secure, and private.
Per the blog, the new upgrade is part of its efforts to ensure transparency of user funds. zk-SNARKs, a zero-knowledge verification method that is aimed to keep sensitive information private and more secure, to its PoR System.
The latest move came amidst growing concerns over the safety of investors’ funds on crypto platforms. Earlier Binance had released a PoR system purely based on Merkle Tree- a cryptographic data structure that can be utilized for verification.
After finding that the Merkle Tree-based system alone was not ideal for user privacy, the team added support for zero-knowledge proofs.
Binance’s Addition Of Zk-SNARK Is Aimed To Build Trust
Zk-SNARK which stands for “Zero-Knowledge Succinct Non-Interactive Argument of Knowledge”, is a cryptographic proof that allows one party to prove it possesses certain information without revealing that information.
This proof is made possible using a secret key created before the transaction takes place.
Binance has also decided to make the zk-SNARK system open-source in order to build greater trust in the platform.
The platform faced a lot of scrutiny after its auditing firm Mazars quit in the aftermath of the collapse of FTX. Mazar helped Binance publish its first Bitcoin proof of reserve report.
The platform’s Asia-Pacific chief Leon Foong told Bloomberg News on February 8 that given that major accounting firms are still learning about the cryptocurrency industry, a thorough audit of the exchange’s reserve may be “some way off.”
According to Foong, the difficulty Binance is having in disclosing its complete audit report is related to the constraints imposed by legacy accounting companies.
“Number on, it’s not their core competence. And number two, obviously there is a lot of scrutiny if they get it wrong.” Foong added.
These limits include a lack of agreed standards for challenges like price volatility that rocks the crypto sector.
Further, Foong disclosed that Binance is working to separate its collateral from customer funds and publish a more comprehensive proof of reserve statement.