Proof-of-Reserves

What is Proof-of-Reserves?

CheckSig provides highly specialized Proof-of-Reserves (PoR) services to ensure the highest level of transparency in digital asset custody.
The Proof-of-Reserves consists of performing a real on-chain transaction from a frozen wallet back to itself, thus verifiably demonstrating that the assets are genuinely under CheckSig’s control.

Each financial institution is assigned a dedicated subaccount, where all client assets belonging to that institution are securely aggregated.
The operational model for the Proof-of-Reserves depends on the custody key configuration: if CheckSig retains full control over the keys, it independently carries out the proof. In cases where the keys are shared between CheckSig and the institution, the verification is performed jointly. When the institution holds exclusive control of the keys, it is responsible for executing the proof autonomously. In this case, CheckSig provides all the necessary information and tools to complete the process easily, ensuring that even staff without expertise in crypto can carry out the activity effectively.

Unlike traditional audits or internal attestations, CheckSig’s Proofì-of-Reserves relies exclusively on public blockchain evidence, ensuring full transparency and independent verification by anyone at any time.

Proof-of-Reserves as a Key Step Toward Proof-of-Solvency

The Proof-of-Reserves (PoR) is an essential first step in verifying the existence and control of assets held by a financial institution. However, on its own, PoR does not provide a comprehensive view of financial integrity. To ensure full transparency and solvency, it must be followed by the Proof-of-Liabilities (PoL).

Proof-of-Liabilities involves reconciling the assets verified on-chain with the institution’s internal accounting, ensuring that the liabilities owed to clients match the corresponding assets. In essence, this step verifies that the institution’s on-chain reserves are fully accounted for in its books, covering all client obligations.

When these two components — Proof-of-Reserves and Proof-of-Liabilities — are combined, they create the Proof-of-Solvency. This integrated verification offers a complete assurance that the assets not only exist but are under control and fully sufficient to meet all of the institution’s liabilities.

By recording all these verifications, financial institutions provide independent, verifiable, and auditable evidence of their solvency. This level of transparency and accountability enables stakeholders to have full confidence that client funds are secure and that the institution is operating with full financial integrity.