Title:
Proving Solvency: Using cryptography and game theory to enable trustless audit (link to video)
Speaker:
Craig Newbold, Proven
Abstract:
Historically, custodians and counterparties have relied on trusted accounting firms to conduct laborious and expensive audits demonstrating their solvency. In fast-moving sectors like crypto, it is challenging to find firms with the requisite combination of trust and domain expertise, and the results are inherently backward-looking. In practice, few crypto exchanges provide assurance that they do indeed have funds to cover customer balances. Recent incidents continue to highlight the importance of exchange solvency for the well-functioning of the crypto ecosystem.
More recently, cryptographic schemes have been proposed to allow exchanges to prove their assets and/or customer liabilities, with varying degrees of privacy. This talk will describe significant proposed and/or implemented schemes and discuss their tradeoffs, including one Proven is deploying. It will also touch on how game-theoretic incentives can be used to maximize trust, again without relying on any trusted third parties.
Bio:
Craig Newbold is co-founder and CTO of Proven, which builds innovative, secure products based on the latest cryptography breakthroughs. Proven’s tools allow exchanges, prime brokers, stablecoins and other participants to cryptographically prove their financial health and provide peace of mind to their customers. Prior to founding Proven, Craig was a senior researcher and risk manager at Jane Street Capital.