What Is the Role of a “Proof-of-Reserve” Oracle?

A Proof-of-Reserve (PoR) oracle cryptographically verifies the actual collateral held by a cross-chain asset or stablecoin issuer, typically on a different blockchain or in a traditional bank account. Its role is to prove that the on-chain representation of an asset is fully backed by the off-chain or cross-chain reserve.

This provides transparency and assurance to users that their assets are not fractional or unbacked, reducing counterparty risk.