Blockchain technology users have a strong expectation of transparency, says Nazarov.
Some entities are beyond saving due to their exposure to companies that lacked transparency.
Integrating Proof of Reserve will eliminate some of the risks associated with cryptocurrency projects.
Transparency is important in the blockchain space
Sergey Nazarov, the founder and CEO of the Chainlink project, told CNBC in a recent interview, that he believes transparency is crucial in the blockchain and cryptocurrency space.
.@SergeyNazarov of @chainlink says transparency is at the core of what the blockchain industry is about. pic.twitter.com/n2xZEeffLI
— CNBC International (@CNBCi) November 30, 2022
According to Nazarov, transparency is at the core of what blockchain technology is about. He said;
“I think transparency is at the core of what the blockchain industry is about. I think blockchain technology users have a strong expectation for transparency already. I also think that certain entities are beyond saving because they’ve already been exposed to risks that having more transparency could have solved. However, having transparency that comes with Proof of Reserve will help the additional risks go away for other entities. This is why you see so many exchanges and DeFi protocols implementing various levels of Proof of Reserve.”
He added that the Proof of Reserve is a very simple and clear solution that fundamentally solves the problem.
Chainlink provides numerous solutions in the blockchain space via its network of decentralised nodes called oracles. The Chainlink oracles provide accurate data, and the network incentivises them via a reward system that uses the LINK token.
Exchanges and DeFi protocols are integrating Proof of Reserve
When asked how companies react to opening their balance sheet to Chainlink to ensure transparency, Nazarov said;
“I think the ones that don’t have much to hide are open to doing it. I think, just like in the global financial system, anywhere there is a financial market, sometimes people overextend themselves and take too much risk. Generally speaking, I have seen a strong willingness from top entities and exchanges to share critical information with us. I think it is because they are aware of these risks, and many of them are trying to manage into a place where Proof of Reserve will prove their solvency.”
Chainlink remains one of the leading cryptocurrencies in the world. At press time, the price of Chainlink stands at $7.52, up by less than 1% in the last 24 hours.
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