Proof of reserves
PoRproof-of-reserves
A cryptographic or attestation-based demonstration that an issuer's reserves match outstanding liabilities.
On-chain proof-of-reserves uses Merkle trees of liabilities + attested asset addresses. Off-chain PoR is typically a signed accountant attestation (see Attestation). Strong PoR addresses (1) reserves exist, (2) reserves are unencumbered, (3) liabilities are fully enumerated. Most public PoR schemes still rely on point (3) being trusted.
Related terms
- AttestationA third-party accountant's signed statement that an issuer's reserve balances match disclosed amounts at a point in time.
- ReservesThe assets backing a stablecoin's outstanding liabilities — for fiat-backed stables, predominantly cash + Treasuries.
- Audit reportA security firm's written review of smart-contract code, classifying findings by severity and tracking issuer responses.