Proof of Reserve
Proof of Reserve is a provable/auditable proof of Bitcoin Liquidity locked in your project.
Introduction
Welcome to the Proof of Reserve Protocol user guide. This document explains how the Proof of Reserve Protocol works and how you, as a user, can access and verify the reserve amounts locked in the protocol. The Proof of Reserve Protocol is designed to support Bitcoin liquidity via Discreet Log Contracts (DLCs), providing a transparent and secure framework for projects to raise funds and for users to stake Bitcoin.
Understanding the Proof of Reserve Protocol
What is Proof of Reserve?
Proof of Reserve is a protocol that allows projects to verify the amount of liquidity raised by identifying a Bitcoin address they own. Users can then lock or "stake" Bitcoin in a DLC, including a message stating their intention to lock the Bitcoin for the project's use. The protocol collects data on the Bitcoin addresses and amounts locked for each project, publishing this information for public verification.
Key Components
Bitcoin Address of Projects: Projects seeking liquidity provide a publicly verifiable Bitcoin address.
User Participation via DLCs: Users stake Bitcoin in a DLC linked to a specific project.
Transparency and Verification: All locked amounts and addresses are published, allowing for transparent verification.
How to Access and Verify Reserve Amounts
Checking Project-Specific Reserves
1.Identify the Project: Find the project you are interested in. Each project has a unique identifier and associated Bitcoin address.
2.Access Reserve Data: All data is published to the Deep Lake Proof of Reserve webpage and Nostr feed.
3.Find the Project's Section: Look for the section detailing the reserves for your chosen project.
4.Review the Data: The amount of Bitcoin locked and the number of participating addresses will be displayed.
5.Review Total Reserves: Here, you will also find the total amount of Bitcoin locked across all participating projects (aggregate amounts).
6.Cross-Verify for Accuracy: For additional verification, you may cross-check these figures with external blockchain explorers.
How to Stake Your Bitcoin
1.Select a Project: Choose a project you wish to support.
2.Initiate the DLC: Follow the instructions provided by the project to initiate a DLC. This will typically involve sending Bitcoin to a specified address and including a signed message of intent.
3.Confirm Transaction: Ensure your transaction is confirmed on the blockchain.
4.Record Keeping: Keep a record of your transaction ID and any relevant details for future reference.
Safety and Compliance
Security: Always ensure you are interacting with legitimate and verified project addresses.
Regulatory Compliance: Be aware of the regulatory implications in your jurisdiction regarding cryptocurrency transactions.
Conclusion
The Proof of Reserve Protocol is a powerful tool for enhancing Bitcoin liquidity and transparency in funding processes. By following this guide, you can confidently access, verify, and participate in the Proof of Reserve ecosystem. For any further assistance or queries, please refer to our FAQ section or contact our support team.
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