Cake DeFi, a Singapore-based decentralized finance (DeFi) services firm, has announced the launch of its Proof of Reserve issuance.
Using the cryptographically-audited Merkle tree method, Singapore-based decentralized finance (DeFi) services firm, Cake DeFi, announced the release of its Proof of Reserves.
The Merkle tree approach, created by Ralph Merkle in 1979, is a means to demonstrate that a certain piece of data is part of a set of data without disclosing the full set of data.
In order to protect the privacy of the platform and its users, the proof of reserves approach uses a Merkle tree to demonstrate that a cryptocurrency exchange has the reserves it claims to have without disclosing the precise amounts of each coin it has.
The DeFi services company claims that users may now view its Merkle tree Proof of Reserves on its website and verify their assets as well as the company’s obligations thanks to a recently launched feature.
With the help of the program, users will be able to audit their own funds using the Merkle tree data structure. In the interest of transparency, Cake DeFi said that it will also give consumers access to real-time on-chain data regarding customer funds, allowing them to observe how yields are produced.
Some officials are still dubious about the merits of the Merkle tree-based proof of reserves, despite the fact that many exchanges, including Binance, Crypto.com, Bybit, and OKX, have implemented it to increase transparency in the wake of FTX’s demise.
Paul Munter, the SEC’s acting top accountant, said that the outcomes of these audits aren’t always a sign that the company is in sound financial standing in an interview with The Wall Street Journal on December 22.
He asserts that exchange proof-of-reserves reports “missing” the information necessary for stakeholders to assess whether the company has sufficient assets to cover its liabilities.
