Binance has released its 23rd proof of reserves snapshot highlighting a drop in the total Bitcoin and Ethereum user assets. According to the report released on October 8th, user assets in BTC for the month of October came in at 596k, down 1.58% as compared to the last month.
On the other hand user assets in ETH for the month were at 4.425 million, down 1.37% as compared to September. Other user assets, like that in USDT stood at 21.41 billion for October, down 3.16% compared to last month.
What Is Proof of Reserve?
The term “Proof of Reserve” originally described the practice of companies holding cryptocurrencies to publicly declare their reserves in order to demonstrate to their depositors—through an independent audit—that they are solvent.
These audits can be drawn out, labor-intensive, and need manual procedures because they are typically carried out by a centralized third party.
The assets that Binance has in custody for users are the ones that they particularly refer to when they talk about Proof of Reserves. By doing this, they are demonstrating that the crypto exchange possesses sufficient funds to cover the assets of every user in a 1:1 ration, in addition to certain reserves.
Binance Announces Addition of Asset Collateral Information
Alongside the PoR report, Binance has also announced the addition of asset collateral information, a major improvement to its Proof of Reserves verification process.
According to Binance, the goal of this update is to provide consumers with more confidence in the security of their money and more transparency.
The recently added asset collateral data shows that users of Binance will always have more assets than liabilities when using them as collateral for loans.
Originally Binance had introduced the PoR snapshot in 2022. After the abrupt demise of FTX, a cryptocurrency exchange with its headquarters in the Bahamas, in 2022, Binance introduced the PoR method using BTC. It began extending to other cryptocurrency assets in 2023 and developed a special webpage for the procedure for its users to access information easily.