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Binance reiterates commitment to user transparency

By Guardian Nigeria
04 December 2022   |   4:28 pm
Binance, one of the world's leading block chain and crypto currency providers has recently taken active steps of its own to restore users’ confidence in the ecosystem. The provider unveiled some of the initiatives they have introduced to the community: In a statement by Binance, it stated that it is topping up Secure Asset Fund…

Cryptocurrency

Binance, one of the world’s leading block chain and crypto currency providers has recently taken active steps of its own to restore users’ confidence in the ecosystem. The provider unveiled some of the initiatives they have introduced to the community:

In a statement by Binance, it stated that it is topping up Secure Asset Fund for Users (SAFU), to $1B. The SAFU, established in 2018 is an emergency insurance fund that was set up to protect Binance users in extreme situations of loss and theft of their digital assets. Due to the recent market conditions, the fund originally valued at $1B fluctuated down to $735m earlier in the year; it has however been topped up to $1B.

This insurance fund comprises BNB, BUSD, and BTC and the funds are raised by allocating 10 percent of all trading fees accumulated on its platform in the case of emergency scenarios, giving Binance the ability to stay ahead of situations where users’ assets have been compromised.

Binance also disclosed that it has established the Industry Recovery Initiative (IRI). In a recent post, Binance explained that the initiative was set up with the aim of rebuilding the industry and protecting users. It also stated that it will devote $1 billion in initial commitments to the recovery fund which may be increased to $2 billion “if the need arises.” Binance stated that IRI is not an investment fund, but terms it a “co-investment opportunity for organizations eager to support the future of Web3.”

In addition, other investment firms including Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group have enrolled and committed an initial aggregate of $50 million between them to participate in the initiative and Binance has already received 150 applications from companies seeking support.

The provider also disclosed it is publishing its Proof of Reserves System (PoR). On Friday, 25th November, following the disclosure of its hot and cold wallet, Binance published its bitcoin pro0f-of-reserves (POR) system, utilizing the Merkle Tree approach – which gives users the ability to verify specific contents that were included within a particular set of “sealed” data. Users can verify their BTC asset balances and transactions held on the crypto exchange’s platform.

Additionally, Binance has also highlighted its future plans for the POR list which include launch of the next batch of PoR, including additional assets in the next two weeks, involving third-party auditors to audit the PoR results and implementing ZK-SNARKs for POR, improving privacy and robustness, and proving the total net balance (USD) of each user is non-negative.

K-SNARKs are tools that provide privacy and simplicity benefits to proof of reserves and liabilities. This is because Binance offers margin and loans services in certain countries, so audit results will show the net balance, equity, and debt of each user.

The crypto space is a rapidly evolving one and now more than ever, the crypto community demands more transparency from crypto exchanges. Collaborations such as the industry recovery initiative need to be an integral part of all crypto exchange efforts for the ecosystem to have any chance of survival.