🔓Proof of Reserves Services

A Brief History of Proof of Reserves

The concept of Proof of Reserves has evolved since the first implementation conceived by Greg Maxwell. In 2013, Maxwell theorized that an exchange could use cryptography to prove custody over customer assets and use Merkle Tree to prove customer liabilities. In 2018, the same concept evolved to proving assets collateralizing a stablecoin and other asset-backed tokens, either monthly or in real-time. In 2020, "off-chain" reserve data was brought onto blockchains via oracle networks (such as Chainlink) to perform an "on-chain" Proof of Reserves.

The Network Firm was the first team to execute a 'real-time' Proof of Reserves in 2018 a CPA-assisted Merkle Tree Proof of Reserves for an exchange in 2020.

In all cases, a "liability" issued to another party is intended to be collateralized by assets held in custody. The formfactor of the asset and liability pair depends on the type of instrument issued and collateralized. In all cases, the Issuer's "promise" is that assets held in custody are greater than the amount of liabilities issued.

Issuer	Liability	Asset
Crypto Exchange	Customer Account on Exchange's Database	Crypto-Assets held in Custody by Exchange
Stablecoin	Token on a Blockchain	Fiat Collateral held in Financial Institutions
Asset-backed Token	Token on a Blockchain	Collateral held in Financial or Custodial Institutions
Exchange-Traded Fund	Security Instrument/Note	Crypto-Assets held in Custody by ETF Issuer

Proof of Reserve Services offered by The Network Firm

The Network Firm offers services to cover all iterations of Proof of Reserves since the ideation of the concept in 2013.

Merkle Tree Proof of Reserves

Periodic CPA Attestation Reports & Merkle Tree for Customer Verification

For Exchanges, Custodians, and Trading Platforms

Real-Time Reserves

CPA Attestations issued every 30 seconds using real-time data.

For Stablecoin, Asset-backed Token, and Exchange-Traded Product Issuers

On-Chain Proof of Reserves

Off-Chain Data provided on-chain via APIs to Oracle Networks for use in smart contracts

For Stablecoin and Asset-Backed Token Issuers

Conventional Proof of Reserve Attestations

Monthly CPA Attestation Reporting for All Digital Asset Issuers

For All Digital Asset Industry Types

What's the difference between these different types of Proof of Reserves?

Service	Reporting Frequency	Defining Characteristic	Industry Client Type
Merkle Tree Proof of Reserves	Monthly, Quarterly, or Semi-Annual	Merkle Tree for Customer Verification	Exchanges, Custodians, Trading Platforms
Real-Time Reserves	Real-Time (every 30 seconds)	CPA Attestations Every 30 Seconds	Stablecoin, Asset-backed Token, and Exchange-Traded Product Issuers
On-Chain Proof of Reserves	Real-Time (every 30 seconds)	Off-Chain Data Published on Chain via Oracle Networks	Stablecoin and Asset-Backed Token Issuers
Conventional Proof of Reserves	Varies	Varies	All

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