Chainlink has entered into a partnership with the London-based accounting firm Harris & Trotter LLP to serve as its auditing firm for all Proof of Reserve verifications.
This move aligns Chainlink with other crypto firms committed to promoting transparency and reliability in the digital asset space.
Chainlink is a decentralized oracle network that connects smart contracts on any blockchain to real-world data, events, payments, and off-chain computation in a highly tamper-resistant and reliable manner.
Chainlink empowers smart contracts on any blockchain to utilize a wide range of off-chain resources, including tamper-proof price data and verifiable randomness.
It is used to fuel Chainlink Price Feeds, granting DeFi smart contracts on-chain access to financial market data.
Harris & Trotter LLP is a chartered accountancy and business advisory firm based in London. It offers a range of services, including general practice, digital assets, music, and entertainment.
The firm provides accounting, bookkeeping, auditing, and tax advisory services to clients across various industries.
Proof of Reserve in crypto
Proof of Reserve (PoR) is a transparent auditing practice employed by cryptocurrency companies to furnish an impartial report of their reserves, demonstrating their solvency to depositors through an independent audit.
PoR is completed by a third-party auditor who creates a snapshot of all of the company’s balances to show transparent “proof” that the crypto company has enough assets to cover its liabilities at any given time.
A key advantage is instilling confidence in customers that the crypto company is not susceptible to a liquidity crisis, assuring them of the ability to withdraw their funds at any time.
PoR is a method of verifying that a trading platform or crypto firm does indeed have 1:1 backing across the digital assets it holds in custody on behalf of its customers.
Although Proof of Reserve has existed for some time, it gained prominence in Q4 2022 when several crypto firms, including Binance, Crypto.com, KuCoin, and OKX, began implementing it to bolster user confidence during a bear market.
For Chainlink, choosing a reputable firm is important and that is why it has gone for the 85-year-old Harris & Trotter LLP, which has also rapidly become a leader in serving the digital asset space since entering 2017.
Other Web3 clients services by the accounting firm include 1inch, The Sandbox, and Blockchain.com.
Further information about the firm shows that it has created a signature matching tool for wallet ownership tests and an NFT royalties audit script.
This shows the interest Harris & Trotter has in delivering cutting-edge solutions to its clients in the digital asset space.
