The exchange also incorporated zk-SNARK into the PoR system to improve transparency.
Binance, the world’s largest exchange by daily trade volume, has officially included Shiba Inu (SHIB) on its Proof of Reserves (PoR) system along with three other mainstream assets. The inclusion was part of the exchange’s recent efforts at improving the PoR system and bolstering transparency for its customers with the use of zk-SNARK.
Binance disclosed the development in a recent announcement through its official Twitter handle. The exchange revealed that they had officially added support for four new tokens on the PoR system, including Shiba Inu. This brings the number of supported assets to thirteen at the reporting time.
Our team made some upgrades to the #Binance Proof of Reserves (PoR) verification system this week.
🧵 Here’s a thread to summarise the updates. pic.twitter.com/TGFg4Q5WMu
— Binance (@binance) February 10, 2023
A look at Binance’s Proof of Reserves page reveals that customers on the exchange hold a net balance of 82.4 trillion SHIB tokens, currently valued at $1.03 billion. However, Binance holds a net balance of 84.4 trillion SHIB worth a whopping $1.06 billion as of press time. At this rate, the exchange reportedly holds customers’ Shiba Inu balances at a reserve ratio of 102.4%.
This development gives Shiba Inu investors on Binance an opportunity to verify that their assets on the exchange are held at a 1:1 ratio. This level of transparency became especially necessary following the FTX blowout, as reports disclosed that the now-defunct exchange did not hold customers’ assets at a 1:1 ratio but used them for “kamikaze” trades.
The inclusion of Shiba Inu highlights Binance’s professional relationship with the project as it grows to secure its position on the global scene. As a testament to its rapport, the exchange restaked 4 trillion SHIB on ShibaSwap shortly after unstaking 12.6 trillion tokens.
How zk-SNARK Improves Transparency
Recall that Binance’s wallets had been reported to hold a cumulative balance of 87 trillion Shiba Inu tokens as at last November. The disclosure came up shortly after FTX collapsed with customers’ funds.
With the inclusion of zk-SNARK in its recent upgrades, Binance takes this transparency to the next level. zk-SNARK, or zero-knowledge succinct non-interactive argument of knowledge, is a cryptographic technology that allows one party to prove to another party that a statement is true without revealing any information about it.
Using zk-SNARKs, Binance can prove that it holds a certain amount of assets, such as SHIB, without revealing its actual assets or the details. It does this by generating a zk-SNARK proof that attests to the fact that its assets are equal to or greater than the total value of all customer balances on the platform.