"Novel Proof of Reserves Protocol with Shorter Proof Sizes

Cryptocurrency exchanges enable customers to own digital assets without having to mine them. They provide customers with user-friendly wallets facilitating trading in digital assets and fiat currencies. Notwithstanding the benefits to customers, the downside of such exchanges is that the customer funds are lost in case an exchange gets hacked or is involved in an exit fraud. Proof of Solvency is a technique which could avert such losses by requiring exchanges to regularly prove to the customers that they own assets at least as much as their liabilities. It consists of two parts: proof of reserves (proving the possession of assets) and proof of liabilities (proving liabilities towards customers). We design RevelioBP [1,4], a novel proof of reserves protocol for MimbleWimble based cryptocurrencies. RevelioBP succeeds in alleviating the drawbacks of Revelio [2] - the current state-of-the-art proof of reserves protocol for MimbleWimble."