What Is the Role of a "Proof-of-Reserve" Oracle? ⎊ Path

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.

What Is a Merkle Tree and How Is It Used in PoR?

What Is ‘Cross-Chain Interoperability’ and How Do Oracles Facilitate It?

What Are the Three Main Types of Stablecoins (Fiat-Backed, Crypto-Backed, Algorithmic)?

How Do Fiat-Backed Stablecoins Prove They Have the Reserves to Back Their Value?

How Do Crypto-Backed Stablecoins Differ from Fiat-Backed Stablecoins in Terms of Reserve Management?

How Does PoR Relate to the Collateral Requirements of a DeFi Lending Protocol?

How Does the Concept of “Full Collateralization” Differ between Fiat-Backed and Crypto-Backed Stablecoins?

How Does a “Proof-of-Reserves” Audit Address Rehypothecation Risk?