Binance recently released a proof-of-reserves (PoR) audit, showing some interesting details about their holdings. Let’s break it down.
Ethereum and Solana: 100% Customer-Owned
The audit, verified using zk-SNARK cryptography, revealed that Binance holds almost exactly the same amount of Ethereum (ETH) and Solana (SOL) as its customers have deposited. There’s practically no extra ETH or SOL left over. This means a 100% reserve ratio for both – Binance isn’t holding any extra as a buffer for these two cryptos.
While this meets Binance’s promise of a 1:1 backing of customer funds, it’s unusual and raises questions about their reserve strategy.
So What Does Binance Hold?
While ETH and SOL are almost perfectly matched to customer deposits, Binance has significantly more of other assets. This suggests they’re prioritizing certain assets for liquidity.
-
Stablecoins: Binance holds a large surplus of stablecoins like BUSD, USDC, FDUSD, and USDT. The reserve ratios are much higher than 100%, indicating a significant buffer.
-
Bitcoin (BTC): Binance has more BTC than its customers hold, showing a reserve ratio slightly above 100%.
-
Other Cryptos: Binance also holds surplus reserves in XRP, SHIB, LTC, BNB, and DOGE. Litecoin, Binance Coin (BNB), and Dogecoin, in particular, show substantial over-collateralization (reserve ratios well above 100%). For example, they hold millions of extra LTC and BNB tokens. Dogecoin also shows a significant surplus.
In short, while Binance fully backs customer ETH and SOL deposits, they maintain a larger cushion in other assets, especially stablecoins and some other popular cryptocurrencies. This likely reflects a strategic decision to manage risk and liquidity across their diverse holdings.
