Binance, the biggest centralized cryptocurrency exchange by volume, has added zk-SNARKs' zero-knowledge proof system to its proof-of-reserves (PoR) verification system to attest that funds held on the platform are backed 1:1.

Currently, the PoR system supports verifying the exchange's reserves for 13 different crypto assets.

The Binance team found the Merkle Tree-based system alone was not ideal for user privacy, so it added support for zero-knowledge proofs.

Zk-SNARK is a cryptographic tool for verifying or proving certain information without actually showing or revealing what that information is. Binance has also decided to make the zk-SNARK system open-source, allowing anyone to review the code. The team maintains that by making the system open-source, it can build greater trust on the platform. 

(By Vishal Chawla)