CEO of Binance said that Proof-of-Reserves (PoR) can restore trust in the crypto industry. I’m not convinced. PoR may increase the transparency of centralized exchanges, but it certainly will not prevent further bankruptcies and problems associated with centralization. This is certainly a step in a good direction, but users should know that DeFi solves the problems associated with centralization completely while the options of Binance and other exchanges remain limited.
- PoR sacrifices privacy for transparency.
- PoR reports should also include information on third-party liabilities.
- Instead of Proof-of-Reserve, we need Proof-of-Audit. The audited source code of DeFi services does not need regulation.
- It is difficult to regulate the possession of a private key. So it is difficult to regulate DeFi.