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On CNBC’s Street Signs, Sergey Nazarov Says Proof Of Reserve Brings Essential Transparency To Blockchain Industry

Building on his recent conversation with Jill Malandrino about the role Chainlink’s Proof of Reserve (PoR) can play in preventing FTX-level crises, Sergey Nazarov sat down with CNBC Street Signs host Tanvir Gill to explain how PoR helps the blockchain industry achieve the level of transparency needed to build a superior financial system. 

“I think transparency is at the core of what the blockchain industry is about, and I think the blockchain industry’s users have very strong expectations for transparency already,” Nazarov said.

PoR uses Chainlink’s industry-standard oracle network to prove publicly and in real time the size and composition of an entity’s balance sheet, constituting what Nazarov calls “a very simple and very clear solution that fundamentally solves” problems like what happened to FTX. 

While he indicated “a very strong willingness from top entities and exchanges” to implement PoR, he believes user demand for transparency will ultimately drive adoption of PoR as the new minimum standard for both the crypto industry and traditional financial markets.

He said an environment that requires cryptographic proof of reserves will help prevent entities from overextending themselves. “I think all of this transparency is probably causing people to be more measured in their risk-taking, which is good for the industry.”

Nazarov believes that by shifting the standard for proving balance sheets from “a general idea” to “very technically clear,” PoR can initiate a much broader dialogue about what institutions should make transparent to users. 

“It’s an evolving conversation, but it’s a very positive one because it creates cryptographic truth around this key part of what’s needed for people to make good risk decisions.” 

Ultimately, he said blockchain technology like PoR can not only help prevent catastrophes like FTX; it also lays the groundwork for a more resilient financial system.

“I think institutions find the transparency we’re talking about here very positive for their risk management. I actually think it’s a huge benefit of our industry compared to the traditional markets.”

Watch a clip from Sergey Nazarov’s conversation with Tanvir Gill on CNBC’s Street Signs.

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