Proof of Reserves (PoR) is a mechanism used to demonstrate to users the correspondence between the digital assets held by a platform and the claimed reserves. PoR aims to increase transparency and trustworthiness, ensuring the security of users' funds.
The working principle of PoR is as follows: The platform conducts regular reserve audits to verify the matching between the held digital assets and the claimed reserves. This audit can be verified through public blockchain explorers, enabling users to check and validate the authenticity of the reserves.
Specifically, the platform publicly publishes the public key address of the reserves, allowing users to verify the digital assets. Users can use this public key address to search and validate the corresponding transaction history and asset balance on the blockchain. By matching with the publicly available digital assets, the platform can demonstrate to users the existence and availability of its reserves.
The advantage of the Proof of Reserves mechanism lies in providing a transparent and verifiable method to ensure the security of the platform's funds. Users can verify the reserve situation through the PoR mechanism, thereby increasing trust in the platform.
In summary, Proof of Reserves (PoR) is a mechanism that demonstrates the correspondence between the digital assets held by a platform and the claimed reserves through public blockchain verification, enhancing the transparency and trustworthiness of the platform.