PoR

Quick Take - PoR (Proof of reserve)

Chainlink Proof of Reserve (PoR) replaces lengthy, opaque audits with automated, transparent, real-time on-chain audits backed by cryptographic truth, using a decentralized network of nodes to prevent a single point of failure.

Overview

PoR enables the creation of a financial system where the fractional reserve practices and inefficient manual auditing processes that have contributed to financial crises in the past are replaced with highly effective on-chain audits with strong decentralization and transparency, secured by math and cryptography.

Secure the minting, burning, and redeeming of wrapped tokens and prevent the creation of unbacked tokens

Replace traditional audits with automated, transparent audits backed by cryptographic truth

Allow users to independently verify wrapped token collateralization on-chain

PoR resources

https://chain.link/case-studies/celsius - Good quotes in this article. "As users and developers adopt more blockchains and layer-2 networks, liquidity becomes siloed across the ecosystem. Unlocking this fragmented liquidity through wrapped tokens and creating more interoperability is a critical challenge for the ecosystem to solve. Without a solution to this issue, the benefits of permissionless composability are reduced and developers need to start from scratch every time a new ecosystem is bootstrapped.

But how can projects make sure that wrapped tokens remain sufficiently collateralized when connectivity between different blockchains is inherently limited? While ensuring that wrapped tokens are collateralized at all times is critical for a robust cross-chain ecosystem, using centralized intermediaries and manual audits introduces efficiency bottlenecks and centralization risks.

An automated process is required that helps secure the minting and redemption of wrapped tokens and enables Celsius to securely, transparently, and reliably audit reserves so that users can move assets between blockchains and provide cross-chain liquidity."

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