When it comes to crypto, knowing how to check your balance is important. But understanding how to verify that your assets are properly recorded is equally valuable.
Following recent security discussions, many users have been asking an important question:
How can I verify my Binance account balance and check it through Proof of Reserves (PoR)?
Let's walk through the process.
Log in to the Binance Website
-> Click on “Wallet”
-> Click on “Verification”
You will be able to find your Merkle Leaf and Record ID within the page.
Select the verification date you want to check. You will then find confirmation of the verification type, your Record ID (specific to your account and this particular verification), the assets that were covered, and your asset balances at the time of the verification.
The Record ID/Merkle Leaf enables you to independently verify that your account balance was included in the liabilities report through our self-verification method.
What is Proof of Reserves (PoR)?
When we say Proof of Reserves, we are specifically referring to those assets that we hold in custody for users. This means that we are showing evidence and proof that Binance has funds that cover all of our users assets 1:1, as well as some reserves.
When a user deposits one Bitcoin, Binance's reserves increase by one Bitcoin to ensure client funds are fully backed.
What this means is that Binance holds all user assets 1:1, including reserves. Binance has zero debt in our capital structure and we have an emergency fund (SAFU fund) for extreme cases, such as hacks or security breaches.
Merkle Tree
What have Binance built?
In order to show that Binance has all user assets backed 1:1, Binance have built and implemented a Merkle Tree (shown below) to allow users to verify their assets are included in the aggregate net account balance. The goal is that every user will be able to verify the 1:1 backing of their asset holdings using their own generated Merkle hash/record ID.
What is a Merkle Tree?
A Merkle Tree is a cryptographic tool that enables the consolidation of large amounts of data into a single hash. This single hash, called a Merkle Root, which acts as a cryptographic seal that “summarizes” all of the inputted data. Additionally, Merkle Trees give users the ability to verify that specific contents were included within a particular set of “sealed” data. We use these properties of Merkle Trees during our Proof of Reserves assessments to verify individual accounts are included within the liabilities report, validated by our zk-SNARKs mechanism.
zk-SNARKs
What have Binance built?
By using a zk-SNARK, a crypto exchange can prove that all Merkle tree leaf nodes’ balance sets (i.e., user account balances) contribute to the exchange’s claimed total user asset balance. Each user can easily access their leaf node as having been included in the process. For each user’s balance set (Merkle tree leaf node), our circuit ensures that:
1. A user’s account balances are included in the calculation of the sum of the total net account balances with Binance.
2. The total net balance of the account is greater than or equal to zero.
3. The change of Merkle tree root is valid (i.e., not using falsified information) after updating an account’s information to the leaf node hash.
What is a zk-SNARK?
A zk-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) is a proof protocol that follows the zero-knowledge principles previously outlined. With a zk-SNARK, you can prove that you know the original hashed value (discussed further below) without revealing what that value is. You can also prove the validity of a transaction without revealing any information about the specific amounts, values, or addresses involved.
Final Thoughts
Understanding your account balance is the first step. Learning how to verify your assets through Proof of Reserves gives you another way to check the information Binance publishes.
In crypto, don't rely on promises alone. Learn how to verify, understand what the evidence means, and take responsibility for your own account security.
Stay informed. Stay SAFU. Verify, don't just assume.
Have you checked your Binance Proof of Reserves yet? Share your experience or questions in the comments. Let's help more people understand how to verify their assets.
#Binance #ProofOfReserves #CryptoSecurity #safu
