Through a Twitter conversation, Chainlink Labs reportedly posed the question, “Will crypto continue to repeat the flaws of the old black-box financial industry? Or will a more effective system develop?
On November 10, 2022, according to Cointelegraph, Chainlink Labs reportedly made its Proof of Reserve (POR) product available as a remedy for ensuing trusting problems in the cryptocurrency exchange industry.
Through a Twitter conversation, Chainlink Labs reportedly posed the question, “Will crypto continue to repeat the flaws of the old black-box financial industry? Or will a more effective system develop? Regarding the inquiry, the platform made the POR product available, saying that it could be used for “verifying centralized exchange asset reserves, off-chain bank account balances, cross-chain collateral, real-world asset reserves, and much more.”
According to information provided by Cointelegraph, a liquidity problem at cryptocurrency exchange FTX has apparently caused the cryptocurrency market to crash during the last few days. It is thought that the fear caused by the exchange’s failure to handle withdrawal requests promptly has spread throughout the bitcoin market.
The cryptocurrency community has held discussions to address the concerns, and one suggestion made is for users to confirm that every exchange they use offers a POR. It is thought that some exchanges have raised concerns about the creation of a PORs system potentially taking weeks or longer, to which Chainlink responded that its product offers the possibility of quick implementation for exchanges.
Additionally, Cointelegraph pointed out that the product uses Chainlink nodes connected to a POR smart contract as well as the exchange’s API and vault addresses. Chainlink thinks that this will address the issue of exchanger trust.
