In the trustless and permissionless world of digital assets, it can sometimes be hard to come by definitive proof that a custodian of your assets has a sufficient balance sheet that actually covers its liabilities. This can lead to a lack of trust among prospective users, at worst discouraging adoption of digital assets and increasing counterparty risks for those in the space.
Conducting an independent proof of reserves audit, much in the same way that public companies are audited can help get around this problem, increasing transparency and reassuring customers of the security of their assets. A proof of reserves audit allows customers to verify that their digital asset service provider is meeting rigorous standards for accountability.
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At Yield App, we believe in full transparency and have therefore partnered with Armanino LLP, one of the top 25 largest independent accounting and audit firms in the United States, to conduct regular proof of reserves audits of our balance sheet.
The first report was completed on January 24, 2022 using a ‘point in time’ methodology to determine the results, and can be read here. We will continue to work with Armanino LLP and other third-party accreditation service providers to release bi-annual independent reports across our group business activities as we grow.
A proof of reserves is an independent audit of a company’s balance sheet conducted by a third party, such as Armanino. These cryptographically reconciled public reports empower customers to verify that the digital asset service providers they use do indeed hold enough assets on their balance sheets to offset their customers’ liabilities.
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Armanino LLP is engaged by many of the leading blockchain firms, including stablecoin issuers and wealth management platforms amongst its 7,000+ clients. Armanino LLP does this in accordance with attestation standards issued by the American Institute of Certified Public Accountants, ensuring full transparency and helping to instill trust.
In the traditional financial world, we don’t often worry about regulated financial institutions becoming insolvent. Even during the great financial crisis of 2008, we have seen governments and central banks opting to bail out these financial institutions and continue to tighten prudential and capital adequacy requirements to ensure the solvency and stability of these important institutions.
When it comes to digital assets, however, there is no central authority or standardized governance that requires stress testing of service providers and naturally users tend to be more cautious. Given the nascent development of regulatory frameworks in the digital asset wealth management sector and the cautious attitude of central banks towards cryptocurrencies, transparency and proof of solvency reporting and audits encompassing decentralized markets can be particularly valuable to users of these innovative services, products and platforms.
READ: Is regulation the death knell of crypto?
Undergoing a proof of reserves audit is an important step for reputable and professional digital assets service providers and a crucial part of the regulatory journey. Self governance, adoption of best practices and broader industry participant cooperation towards transparency all serve to improve the sector as a whole for service providers and users alike.
Such audits offer proof and confidence in a firm’s own internal systems through rigorous inspection by industry experts. At Yield App, we believe it is impossible to build a strong, long-lasting business without trust from our community. As we continue to hold ourselves to the highest regulatory standards, we hope we can lead by example, driving the entire digital asset wealth industry into a secure and successful future.
Yield App has partnered with Unstoppable Domains, a leading provider of NFT domains, to offer our customers free, fully customizable Web3 domains. Yield App Silver Tier members and above can claim a free $40 NFT domain, while Diamond Tier customers will receive a code allowing them to claim an additional domain worth $100!
Yield App has partnered with Unstoppable Domains, a leading provider of NFT domains, to offer our customers free, fully customizable Web3 domains. Yield App Silver Tier members and above can claim a free $40 NFT domain, while Diamond Tier customers will receive a code allowing them to claim an additional domain worth $100!
Our customers have been asking us to share our product plans to gain better visibility of the areas Yield App is prioritizing right now, and in the months to come. In the interests of transparency and in response to these requests, we are publishing our current product plans.
Our customers have been asking us to share our product plans to gain better visibility of the areas Yield App is prioritizing right now, and in the months to come. In the interests of transparency and in response to these requests, we are publishing our current product plans.
We are thrilled to announce the launch of our long-awaited mobile app, which makes earning on your digital assets simpler than ever before. Our brand new, intuitive mobile app for iOS and Android allows you to seamlessly manage your digital wealth on the go.
We are thrilled to announce the launch of our long-awaited mobile app, which makes earning on your digital assets simpler than ever before. Our brand new, intuitive mobile app for iOS and Android allows you to seamlessly manage your digital wealth on the go.