{"id":298099,"date":"2023-02-12T19:30:04","date_gmt":"2023-02-12T19:30:04","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=298099"},"modified":"2023-02-12T17:37:03","modified_gmt":"2023-02-12T17:37:03","slug":"binance-adds-zk-snark-verification-to-its-proof-of-reserves-system","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/binance-adds-zk-snark-verification-to-its-proof-of-reserves-system\/","title":{"rendered":"Binance adds zk-SNARK verification to its proof of reserves system"},"content":{"rendered":"<p>Binance has <a href=\"https:\/\/www.binance.com\/en\/blog\/ecosystem\/how-zksnarks-improve-binances-proof-of-reserves-system-6654580406550811626\">upgraded<\/a> its proof-of-reserves (PoR) system with zk-SNARK verifications, a form of zero-knowledge proofs that preserves the privacy and security of sensitive user information.<\/p>\n<p>Binance CEO Changpeng Zhao <a href=\"https:\/\/twitter.com\/cz_binance\/status\/1623971713431007232\">said<\/a> the improvement was implemented in accordance with Ethereum co-founder Vitalik Buterin's <a href=\"https:\/\/cryptoslate.com\/vitalik-buterin-coinbase-kraken-binance-promote-trustless-cexs\/\">suggestion<\/a>. Buterin had laid out his ideas on promoting trustless centralized exchanges through transparent proof-of-reserves systems in November.<\/p>\n<p>Binance <a href=\"https:\/\/cryptoslate.com\/binance-publishes-btc-proof-of-reserves-to-provide-more-transparency-on-customer-funds\/\">first published<\/a> its PoR system in November 2022 as users started demanding more transparency from exchanges in the aftermath of the FTX collapse. At the time, Binance used Merkle tree cryptography to enable users to verify their holdings.<\/p>\n<p>Yet, the system had two major drawbacks. Firstly, the leaf nodes in the Merkle tree represented the hash of users' holdings to protect privacy, which meant that the Merkle root could not <span class=\"css-6hm6tl\" data-bn-type=\"text\">reflect the sum of its leaf nodes\u2019 balance information.<\/span><\/p>\n<p>Secondly, a malicious entity could potentially add a negative balance under a fake account somewhere in the tree to make the size of required reserves appear smaller.<\/p>\n<p class=\"RichTextParagraph css-127w7vq\">Binance claims that zk-SNARKs solve these challenges. The zero-knowledge verification system can ensure that all leaf nodes in the Merkle tree have contributed to Binance's claimed total user balance of each cryptocurrency. It will also ensure that there is no user with a negative balance included in the tree.<\/p>\n<p>Binance will generate and publish zk-SNARK proof for the construction of the Merkle tree to prove its reserves. By verifying the Merkle proof Binance users can check whether their balance is included in the Merkle tree root. Users can verify the zk-SNARK proof to ensure that the Merkle tree construction was free from any tampering.<\/p>\n<p>Because Binance has millions of users, it's not possible to get a single proof of the Merkle tree construction. Therefore, Binance will split users into batches of 864 each. It would take 110 seconds to generate zk proof for a single batch of users. The proof can be verified in less than 1 millisecond.<\/p>\n<p>It would take 2 hours for Binance to generate proof for all accounts at the cost of about $1,000. The exchange is working on implementing the solutions suggested by Buterin to improve the efficiency of the proof generation process, which should lower cost and enable it to provide proofs more frequently.<\/p>\n<p>Binance's PoR system currently supports 13 cryptocurrencies, with 4 recent additions, and it plans to add more tokens in the coming weeks.<\/p>\n<p class=\"RichTextParagraph css-127w7vq\">Binance is also making the code for its PoR system open-source with the aim of providing more transparency to its users.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Binance has upgraded its proof-of-reserves (PoR) system with zk-SNARK verifications, a form of zero-knowledge proofs that preserves the privacy and security of sensitive user information. Binance CEO Changpeng Zhao said the improvement was implemented in accordance with Ethereum co-founder Vitalik Buterin&#8217;s suggestion. Buterin had laid out his ideas on promoting trustless centralized exchanges through transparent [&hellip;]<\/p>\n","protected":false},"author":1386,"featured_media":298145,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[39],"tags":[],"post_folder":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.9 (Yoast SEO v21.9.1) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Binance adds zk-SNARK verification to its proof of reserves system<\/title>\n<meta name=\"description\" content=\"Binance implemented the upgrade following Vitalik Buterin&#039;s suggestions on improving transparency of proof-of-reserves systems.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/cryptoslate.com\/binance-adds-zk-snark-verification-to-its-proof-of-reserves-system\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Binance adds zk-SNARK verification to its proof of reserves system\" \/>\n<meta property=\"og:description\" content=\"Binance implemented the upgrade following Vitalik Buterin&#039;s suggestions on improving transparency of proof-of-reserves systems.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/cryptoslate.com\/binance-adds-zk-snark-verification-to-its-proof-of-reserves-system\/\" \/>\n<meta property=\"og:site_name\" content=\"CryptoSlate\" \/>\n<meta property=\"article:published_time\" content=\"2023-02-12T19:30:04+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-02-12T17:37:03+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2023\/02\/binance-zksnark.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1200\" \/>\n\t<meta property=\"og:image:height\" content=\"630\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Monika Ghosh\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:site\" content=\"@cryptoslate\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Monika Ghosh\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"NewsArticle\",\"@id\":\"https:\/\/cryptoslate.com\/binance-adds-zk-snark-verification-to-its-proof-of-reserves-system\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/cryptoslate.com\/binance-adds-zk-snark-verification-to-its-proof-of-reserves-system\/\"},\"author\":{\"@type\":\"Person\",\"@id\":\"https:\/\/cryptoslate.com\/author\/monika-ghosh\/#person\",\"name\":\"Monika Ghosh\",\"url\":\"https:\/\/cryptoslate.com\/author\/monika-ghosh\/\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/cryptoslate.com\/author\/monika-ghosh\/\"},\"image\":{\"@type\":\"ImageObject\",\"@id\":\"https:\/\/cryptoslate.com\/author\/monika-ghosh\/#authorimage\",\"url\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/08\/monika-ghosh-author-300x300.jpg\",\"contentUrl\":\"https:\/\/cryptoslate.com\/wp-content\/uploads\/2022\/08\/monika-ghosh-author-300x300.jpg\",\"caption\":\"Monika Ghosh\"},\"jobTitle\":\"Former Reporter\",\"description\":\"Monika started reading about crypto in 2020 and went deeper and deeper down the rabbit hole. 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