Chainlink Proof of Reserves is included into Backed to increase trustworthiness of tokenized assets
Backed, a market leader in financial technology, said on October 26 that it has adopted Chainlink’s (LINK) Proof of Reserve (PoR).
By integrating this strategy, users can verify the collateralization of their tokenized assets in a transparent and trust-minimized manner, which is a huge step forward in establishing and maintaining user confidence.
Independently and on-chain, Backed users may now verify the adequacy of collateral reserves at any moment thanks to Proof of Reserves. A need, according to the most recent data provided to Finvold, for protecting the authenticity of tokenized assets.
Backed immediately begins the process of obtaining the matching underlying asset for each bToken that is purchased. The first step in this process is for the client to communicate with their broker and place a buy order for the underlying asset.
The user will then get the tokens. Incredibly, this shortened procedure can be completed in a matter of minutes, and Backed is still committed to developing even more effective methods.
The Auditing API is managed by The Network Company, the engine behind the auditing prowess. With read-only access to Backed’s custodial bank accounts, this third party may constantly keep tabs on account balances and provide rapid API data refreshes (every 10 minutes, to be exact).
In addition, the time it takes for securities to travel from the issuer to the bank account is carefully documented as a separate data point. Backed’s Swiss custodian has full access to this comprehensive internal data that verifies the incoming assets.
This accumulated data is subsequently verified by the trustworthy decentralized oracle network of Chainlink Proof of Reserve. Chainlink PoR is notable since it refreshes its data daily or whenever there is a change in the reserve volume of more than 10%.
To provide a convincing Proof of Reserves solution for their most in-demand items, Backed makes sure this aggregated data is available on their website and on the blockchain.
Co-Founder Adam Levi Said: “When we founded Backed, we understood the critical importance of having independently verifiable, on-chain, transparent data demonstrating complete collateralization of our assets. Chainlink Proof of Reserve integration is a significant step toward the company’s objective of developing goods with 1:1 verifiable backing and complete composability.
When on-chain assets are backed by off-chain reserves, the Chainlink PoR mechanism makes it easier to provide data to smart contracts so that they may make informed decisions about the appropriate amount of collateralization.
In addition, a distributed system of oracles is used to ensure the authenticity of collateral in real time. This approach is designed to protect users’ funds against fraudulent or unforeseen fractional reserve practices.
Chainlink PoR is utilized to facilitate automatic verification on the blockchain, which eliminates the need for paper guarantees. This method promotes better openness in regards to collateralization of assets and provides customers with a higher degree of comfort about the collateralization of an asset.
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