Binance Marks Two Years of Proof of Reserves with Extensive Asset Backing

As Binance’s Proof of Reserves (PoR) program approaches its two-year mark, the exchange reports that its system now covers 35 tokens with over $150 billion in reserves. This level of asset coverage is among the largest in the industry, according to the latest company announcement.

Proof of Reserves (PoR) is a transparency measure that enables centralized exchanges (CEXs) to demonstrate they hold sufficient assets to fully cover all user deposits. PoR is crucial because centralized exchanges take custody of customer funds, which can make these funds vulnerable to potential misuse. By providing regular PoR disclosures, exchanges aim to build user confidence by showing the stability and security of their asset reserves.

PoR reports generally show the number of assets covered, the total amount of assets reserve and reserve ratios for key assets, illustrating whether the exchange has met or exceeded 100% of user deposit requirements. Most major exchanges have implemented PoR transparency practices. While some exchanges cover only major assets like BTC, ETH, USDT, and USDC, others include a broader range of assets to demonstrate that even niche tokens are fully backed.

For example, OKX’s PoR program includes 22 assets backed by $20.2 billion in reserves, while Bitget reports reserves of $3.98 billion covering 4 assets. Bybit’s PoR covers 40 assets, though its overall users’ asset size is much smaller compared to Binance.

 Source for Assets Reserve: Defillama

Binance’s monthly PoR reports aim to provide transparency regarding the backing of user assets on its platform. The October report shows reserve ratios exceeding 100% across major assets, with BTC at 106%, ETH at 100.6%, and USDT at 111%. Binance states that these ratios help ensure the security and accessibility of user funds.

Since launching its PoR program in 2022, Binance has incorporated advanced cryptographic techniques, including zk-SNARKs and Merkle tree structures. These methods enable users to independently verify that their assets are part of the total reserves without compromising privacy. 

In addition to PoR transparency, Binance maintains a zero-debt capital structure, which it argues reduces financial risks in volatile market conditions. The exchange has also established a Secure Asset Fund for Users (SAFU), a dedicated emergency reserve designed to protect user assets in extreme situations.