The Architecture of Trust
Proof of Reserves
A cryptographic audit proving a custodian holds assets matching deposits — a need eliminated entirely by self-sovereign custody.
Definition
A cryptographic audit mechanism by which a custodian demonstrates it holds sufficient assets to cover all customer deposits — without revealing individual account balances. Proof of Reserves typically employs Merkle trees to allow independent verification. The need for such proofs is itself an indictment of custodial models: a self-sovereign architecture like CLAVI eliminates the concept entirely, because the user is the custodian.