US crypto exchange giant Coinbase is launching an initiative to help encourage more transparency among companies in the industry, particularly around proof of reserves.
In a blog post, Coinbase says it is exploring new ways to prove reserves using more crypto-native methods, and announces a $500,000 developer grant program to encourage others to do so as well.
Coinbase says that following the collapse of crypto exchange FTX, investors in the space deserve the assurance that they will have the ability to withdraw their funds after depositing in centralized platforms.
The company lists several general suggestions for how proof of reservations could be done in the future, including disclosing the on-chain address with proof of access to the address’s private key.
Says Coinbase Chief Security Officer Philip Martin
“A silver lining in FTX’s collapse is the emphasis on transparency of assets and liabilities of different crypto firms. At Coinbase, we believe you deserve the best of tradfi (traditional finance) and DeFi (decentralized finance). Today, we are the only crypto company to offer the transparency and assurance of a financial audit from a public company. For tomorrow, we are working towards a decentralized system where you don’t have to trust us or any institution. You just have to trust the calculations. Everything must be transparent, immutable and verifiable by all.
In order to take concrete steps towards this future world, we are announcing a new grant for developers through Coinbase’s Crypto Community Fund 2023. We have allocated $500,000 to support individuals or teams advancing the state of the art in blockchain accounting, privacy-preserving techniques related to proof of assets or liabilities (including including the application of zero-knowledge techniques) and/or closely related technologies.
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