Cake DeFi publishes Merkle tree-based Proof of Reserves

Published at: Jan. 4, 2023

Singapore-based decentralized finance (DeFi) services firm, Cake DeFi, has announced the release of its Proof of Reserves using the cryptographically-audited Merkle tree method. 

Developed by Ralph Merkle in 1979, the Merkle tree method is a way of proving that a certain piece of data is included in a set of data, without revealing the entire set of data. Under the proof of reserves method, a Merkle tree is used to prove that a cryptocurrency exchange has the reserves it claims to have, without revealing the exact amounts of each cryptocurrency that it holds, in order to protect the privacy of the platform and its users.

Security and transparency aren't just duties, they're a necessity, and we live them every day. As part of our ongoing effort to build the most trusted and transparent one-stop #DeFi and Web3 platform, we are publishing our #ProofofReserves https://t.co/btWi3bbqxJ

— Cake DeFi (@cakedefi) November 11, 2022

According to the DeFi services firm, users can now verify their assets, as well as the company's liabilities, in a newly rolled-out feature that grants public access to its Merkle tree Proof of Reserves, available on its website. The tool intends to enable users to perform a self-audit of their own funds under the Merkle tree data structure. 

In the spirit of transparency, Cake DeFi said it will also enable users to see how yields are generated, with real-time on-chain data about customer funds.

Related: Cake DeFi launches $100M venture arm for Web3, gaming, and fintech initiatives

Although many exchanges such as Binance, Crypto.com, Bybit, and OKX, have all rolled out Merkle Tree-based proof of reserves to promote transparency following the collapse of FTX, some officials remain skeptical about the efficacy of the Merkle tree-based proof of reserves. 

In a Dec. 22 interview with The Wall Street Journal, the SEC’s acting chief accountant, Paul Munter, shared that the results of these audits aren’t necessarily an indicator that the company is in a good financial position. According to him, proof-of-reserves reports by exchanges “lack” sufficient information for stakeholders to determine whether the company has enough assets to meet its liabilities.

Tags
Technology
Blockchain
Business
Cryptocurrency Exchange
Cryptocurrencies
Decentralized Exchange
Web3
Related Posts
Crypto options are turning mainstream
Despite ongoing vaccination efforts and pandemic aid, the world’s economy looks remarkably different than it did over a year ago. The new financial landscape and continued uncertainty have accelerated the shift away from traditional financial institutions. As the economy attempts to roar into high gear from a standing start, the world of cryptocurrency has taken to the main stage. It has cemented itself as a recognized asset class by major asset managers, investment banks and hedge funds. As the speed of mainstream adoption continues to take the financial world by storm, it is also paving the way for investors to …
Technology / July 10, 2021
Near Project’s Octopus Network lays off 40% of its staff amid crypto winter
Octopus Network, a decentralized app chain network natively built on NEAR Protocol, has announced that it will be “refactoring” to adapt to current market conditions. As part of its refactoring process, Octopus network will let go of roughly 40% of its team, which accounts for 12 out of 30 members. The remaining staff will also be subjected to a 20% salary cut, while its team token incentive will be suspended indefinitely. According to Louis Liu, the founder of the Octopus Network, although he has lived through previous crypto winters, “this winter is very different from the others.” Liu said he …
Technology / Dec. 26, 2022
Alameda wallet under liquidator control incurred $11.5M in losses: Arkham
The liquidators of Alameda Research have reportedly incurred at least $11.5 million in losses since taking control of Alameda's trading accounts. On Jan. 16, a Twitter thread from Arkham Intelligence reported that one wallet under the control of liquidators has seen a string of "significant losses" due to liquidations, some of which were "preventable losses." Over the past two weeks being under Liquidator control, the account incurred significant losses: Largest single liquidation: $4.85M Total liquidated amount: $11.5M Preventable losses: $4M+ — Arkham (@ArkhamIntel) January 16, 2023 As one example, Arkham noted that the account ending 0x997 initially had a short …
Technology / Jan. 17, 2023
Digital bank Revolut launches crypto staking for UK and EEA customers: Report
United Kingdom-based neo-banking platform Revolut, which boasts 25 million customers globally, has introduced crypto staking to its U.K. and European Economic Area (EEA) customers. According to a report by London-based news agency altfi, the staking feature is expected to go live this week, allowing users to generate income on their crypto assets during its "soft testing" phase. At present, the staking feature is available for Polkadot (DOT), Tezos (XTZ), Cardano (ADA), and Ether (ETH) crypto assets, with yields ranging from 2.99% to 11.65%. However, these yields are not guaranteed. In cryptocurrency, staking is a process where an individual holds or …
Technology / Feb. 6, 2023
Binance upgrades Proof of Reserves verification to include zk-SNARKs
On Feb 10, Cryptocurrency exchange Binance announced a major upgrade to its Proof of Reserves Verification system to include zk-SNARKs — a cutting-edge technology that Binance says will allow it to verify its reserves in a more secure and transparent manner. 3. Product and Service. Plus transparency. The #Binance Proof of Reserve system has now integrated with zk-SNARK, a zero-knowledge verification method. It will also be made open source. We hope this would help the entire industry benefit. https://t.co/ijVVeF8iFT — CZ Binance (@cz_binance) February 10, 2023 After the FTX incident in 2022, Proof of Reserves Verification became a crucial aspect …
Technology / Feb. 10, 2023