Binance Claims It Has $63 Billion In Reserves, Confirms Addition Of 11 Tokens To PoR

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The Binance exchange has just shared an update, which is related to the Proof of Reserve (PoR) of their platform. The exchange has announced having added more cryptocurrencies to its PoR.

Binance Adds More Crypto to PoR

The teams at the Binance exchange announced on March 7 that they have added more tokens to the PoR group. These tokens are also part of the reserves that the exchange holds.

Thus, they will be included in all future reports, representing their overall reserves in cryptocurrencies. As per the officials, they have added 11 more cryptocurrency assets to the PoR report they are to generate.

Tokens Included in the PoR

As per the officials, these tokens are Dogecoin (DOGE), (SSV), Hashflow (HFT), PowerPool (CVP), 1inch Network (1INCH), Curve DAO Token (CRV).

More tokens include Chromia (CHR), The Graph (GRT), WazirX (WRX), Enjin Coin (ENJ), and Mask Network (MASK).

With the addition of 11 more cryptocurrencies, the total count of the exchange for the PoR tokens has surged to 24 assets. The total funds reserved in these 24 assets across the exchange are worth more than $63 billion.

Largest PoR Assets

Despite the addition of new assets, the top three cryptocurrency assets in the overall cryptocurrency market have the highest reserves on the exchange.

The token with the largest reserves in Binance is Tether (USDT), which has $16.3 billion worth of reserved funds. Then comes Bitcoin (BTC) which has $12.7 billion worth of reserved funds.

Then the third largest reserve is formed by Ether (ETH) which has $7.1 billion worth of reserved funds.

Limitations of PoR

The need for Proof of Reserve was felt just as the cryptocurrency exchanges fell to the wrong side of the investors due to the FTX exchange.

As the FTX brand went bankrupt, the investors and users of the cryptocurrency exchanges lost their faith in the entire industry.

It was a terrible situation for the entire cryptocurrency industry and the crypto exchanges were having the worst time.

The crypto exchanges had to come up with a solution to provide transparency and clarity to the investors/users about the reserved funds.

This way, the users would have a good idea about the financial and reserve situation of an exchange. It was considered a highly effective and efficient approach to winning back the trust of the investors.

However, crypto market experts have argued that the PoR method is not something that is to last for long. There are many limitations to this method and the users must remain warned and vigilant.

The experts have warned that the PoR lacks a detailed report and transparency on collateralization and leverage. The method does not even provide useful information about the proof of liabilities.

There is a great risk of the user information getting leaked or breached during the PoR. Therefore, it is very important that the platforms must work on the proof of liabilities so they have peace of mind about their data.

Announcement by Binance

When the same concern was raised with Binance when it started to report the PoR in November, it provided an explanation on the matter.

The exchange said that it is using the Merkle trees for PoR purposes and using that technology, it adds up the data from the blockchain.

The exchange clarified that the funds belonging to the customers are held in their custody with a 1:1 ratio. It was on February 2023, when Binance announced that it had shifted its use from Merkle to ZK-SNARKs.

They had claimed that the upgrade would ensure that the security and privacy of the users increased security. Their information would be secured and kept safe throughout the verification process.

Binance has been under great pressure because the first-ever audit it had carried out for PoR purposes was heavily criticized.

Even fellow cryptocurrency exchanges criticized the collateralization and reserves that Mazars had shown as they completed their audit for Binance.

Mazars later removed Binance’s audit report from their website altogether and no longer deals with crypto exchanges for the same services.

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