2. Problem Context

Problem Context

Platforms that custody crypto assets on behalf of users do not always maintain a 1:1 reserve ratio. In many cases, assets are lent, leveraged, or simply nonexistent. This results in:

• Loss of user trust.

• Panic-driven mass withdrawals (bank runs).

• Systemic collapses.

While Proof of Reserves (PoR) mechanisms exist, current implementations are inconsistent, fragmented, and difficult to verify for non-technical users.