Gold and Silver Standard Proof of Reserve
Proof of Reserves is a method which addresses the transparency concerns on assets held on exchanges. It is a much-required vetting technique to ensure that crypto is backed by real assets.
In a decentralised space like Crypto where systems are preferably designed to not have a single point of failure, it is imperative to have checks and balances in place.
There have been instances of bankruptcies in the case of traditional financial institutions as well. The concept of Proof of Reserve brings in the best of both worlds which is the transparency of asset management and the privacy of customer assets.
AUS & AGS have a publicly verifiable token supply, account balances, and on-chain procedures - giving us full Proof of Reserve. We have been using the following method ever since launching our AUS and AGS tokens back in 2019.
So how does this all work for Gold & Silver Standard?
Upon physical metals being secured in Reserve Vault, the bars (weight, brand, serial number) are entered into the Proof of Reserve Database.
Our minting software then reads that database and mints the new tokens corresponding to that metal added and updates the database with the TXID for each bar. You can interrogate our Proof of Reserve Database on our website at any time.
To add additional assurance to our Proof of Reserve Database, Gold & Silver Standards physical precious metals holdings are audited every quarter securely within Reserve Vault.
So how does the audit work?
An independent assurance firm downloads the latest database records for each metal.
Each bar on the database is checked by the assurance firm to ensure both the weight and serial number are as recorded on the database. A report of factual findings is produced.
Bars are loaded into tamper evident storage units sealed with a unique serial number noted by the assurance firm. This serves two purposes. For us, it means we don’t need to re-count tonnes of metal every quarter; only that added or changed during the preceding quarter. For you it means the metal can’t be ‘used’ between audits. If it is disturbed it will be immediately evident to the assurance firm and noted on the report. Of course, given tokens can be redeemed for metal, there will be times when seals are broken to access metal for redemptions but this will be obvious and noted by the report and the database.
The assurance firm will randomly check 1 in 5 bars for purity and weight. In Australia, precious metals bullion must be at least 99.5% pure for gold (though in practice all gold bullion is 99.99%) and 99.9% pure for silver. These will be the standard for Gold and Silver Standard metal held. Any exceptions to that would be noted in the report. The assurance firm will use a Sigma Metalytics precious metal verifier which tests deeper and does not get fooled by ‘plating’.
The latest assurance report is available on our website for you to view at any time.
So if you’re considering buying the ultimate fully backed digital asset, choose Gold and Silver Standard – proudly full Proof of Reserve.