Binance Proof of Reserves Audit: Spotlight on Ethereum and Solana
In an extensive audit released on June 1, Binance, the globe’s leading cryptocurrency exchange by trading volume, has placed Ethereum (ETH) and Solana (SOL) in the spotlight. This in-depth analysis underscores Binance’s commitment to ensuring that all customer assets are fully backed on a 1:1 ratio, reinforcing trust within the crypto community. However, an intriguing revelation from the audit is that Binance holds no extra reserves of ETH and SOL beyond what customers have deposited. This finding prompts a deeper examination of Binance’s asset management strategies and its internal prioritization of different cryptocurrencies.
Ethereum and Solana: A Perfect Balance in Customer Assets
According to a report by industry expert MartyParty on X (previously known as Twitter), Binance’s June audit, verified through cutting-edge zk-SNARK cryptography, reveals that the Ethereum and Solana balances are nearly identical to user deposits, leaving only a negligible surplus under Binance’s control. Currently, Ethereum holdings are reported at 5,337,118.325 ETH, closely paralleling the customer net balance of 5,337,110.337 ETH.
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Solana mirrors this scenario, with Binance holding 23,017,153.973 SOL against customer deposits of 23,017,150.874 SOL. This results in a 100.00% reserve ratio for both Ethereum and Solana, indicating that Binance does not maintain an over-collateralization or buffer in these cryptocurrencies. Although this practice aligns with the exchange’s policy of full asset backing, it might reflect a strategic choice to allocate reserves to other digital assets, potentially adapting to shifting user demand or internal treasury decisions.
Understanding Binance’s Asset Holdings
While Ethereum and Solana are matched precisely to customer balances, Binance exhibits a contrasting approach with other cryptocurrencies. The exchange maintains higher reserves in key cryptocurrencies and stablecoins, indicating a robust liquidity buffer. Stablecoins, in particular, dominate the reserve holdings with BUSD, USDC, FDUSD, and USDT showing reserve ratios of 161.86%, 153.01%, 112.86%, and 101.52%, respectively. This suggests a strategic preference for holding excess reserves in these currencies to ensure liquidity and stability.
Bitcoin reserves on the platform are notably strong, with 606,080 BTC compared to customer balances of 593,411 BTC, yielding a reserve ratio of 102.13%. Additionally, Binance maintains surplus reserves in cryptocurrencies like XRP and Shiba Inu (SHIB). The highest reserve ratios are observed in Litecoin (LTC), Binance Coin (BNB), and Dogecoin (DOGE). Litecoin boasts a 113.61% reserve ratio, while Binance Coin and Dogecoin show reserve ratios of 111.74% and 110.99%, respectively. This over-collateralization reflects a strategic decision to ensure ample liquidity in these digital assets.
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