Former traders from Jane Street and PIMCO have raised $15 million to create a new protocol for proof-of-solvency intended for use by centralized exchanges, stablecoin issuers, and other asset managers in the cryptocurrency space. The protocol, called Proven, employs zero-knowledge evidence to disclose an institution’s liabilities and assets without revealing any personal customer data, a report in Cointelegraph said.
The team behind Proven consists of portfolio managers, quantitative traders, and researchers from several Wall Street companies, including Two Sigma, PIMCO, Elm Partners, and Jane Street. Framework Ventures, a crypto-focused venture capital fund, led the $15 million seed round.
Proven aims to provide a mutually beneficial solution that instills confidence in customers and regulators while preserving privacy. The team believes this protocol can help restore public trust in the crypto industry, which has shaken high-profile cases of fraud and hacks.
According to Richard Dewey, Proven’s co-founder, effectively building customer trust while maintaining privacy has been a long-standing challenge for both conventional financial associations and digital asset enterprises. Proven seeks to tackle this issue by implementing a protocol that instills confidence in buyers and regulators while defending sensitive consumer data.
Proven has already secured several clients, such as Bitso, TrueUSD, CoinList, and M11 Credit, and plans to expand its client base in the coming months.
Many stablecoin issuers, centralized exchanges, and other crypto custodians sought greater transparency following the collapse of FTX last year. Delivering cryptographic guarantees of assets and liabilities has been challenging, especially verifying off-chain liabilities. Proven aims to tackle this challenge by presenting zero-knowledge evidence of solvency that enables exchanges to demonstrate that customer credits are non-negative utilizing ZK proofs. The team is optimistic that this method will assist exchanges in increasing transparency while preserving customer privacy.
While no learning proofs have certain limitations, the team behind Proven hopes their protocol’s potential to bring greater transparency to the crypto industry will be realized. They hope that their solution will be widely embraced and aid in restoring trust in the industry.
