Vitalik Buterin seeks to build proof-of-reserves protocol with Binance as ‘guinea pig,’ says Binance chief

Changpeng Zhao, founder and CEO of Binance, said on Monday that Ethereum founder Vitalik Buterin is looking to develop a proof-of-reserves protocol and Binance may be the “guinea pig” and serve as its first test case.

See related article: Binance says it will set up crypto recovery fund, industry standards group

Fast facts

• Zhao said in an AMA (Ask Me Anything) on Twitter on Monday that he spoke in the afternoon with Buterin, who wants to “come up with some type of new proof-of-reserve protocol.”
• Zhao also said that Binance did not have loans or debt. “We don’t owe anybody any money.”
• “We do have market makers. We rely very heavily on third-party market makers that provide liquidity,” Zhao added. “There is one market maker which I’m an investor and shareholder of, and I make sure that that liquidity provider does not make profits…So [it] just provides liquidity in the market.”
• Zhao said that four or five funds have contacted Binance about the industry recovery fund that the exchange is working on to aid projects short on cash but have a strong business model.
• Also on Monday, Zhao said in Indonesia at the B20 Summit that Binance plans to set up a global cryptocurrency association to “set very strong standards for the industry.”
• Zhao’s comments came amid the collapse of the FTX.com crypto exchange, which filed for Chapter 11 bankruptcy in the U.S. on Friday. 

See related article: FTX bankruptcy and fallout: Monday updates and commentary