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Token investing requires trust and openness. Investors often have to trust that their money is safe, that their investments exist, and that they are being managed well.
This is where the proof of reserves comes in. Tokenization platforms use "proof of reserves" (POR) to verify their assets.POR involves proving the platform has enough reserves to meet its obligations. It acts as a guarantee. a guarantee that investors' assets exist and are being managed effectively.
Proof of reserves when tokenizing real estate assets like gold mines is invaluable. Gold mines are large investments; therefore, investors must trust that their money is safe and the enterprise is authentic. POR validates that the tokenisation platform controls the gold mine and has enough reserves to meet investment obligations.
Without PoR, investors couldn't verify the platform's assets. Lack of transparency can damage the platform and investment potential by eroding trust. POR is essential to tokenization because it provides investors with transparency and the confidence to make smart investments.
POR, in addition to providing transparency, aids in the prevention of fraud and mismanagement. Tokenization platforms must maintain a certain amount of reserves in order to meet their obligations to investors. PoR checks to see if the platform has these reserves, and if it doesn't, it's a dead giveaway that something is wrong. This can stop fake platforms from taking advantage of investors and also help find mismanagement of assets.
Chainlink is the standard for designing, accessing, and providing oracle services for hybrid smart contracts on any blockchain. Chainlink Oracle networks can safely link smart contracts to external APIs and do safe calculations off-chain to make apps with lots of features. Chainlink secures tens of billions of dollars in DeFi, insurance, gaming, and other businesses. It connects leading data suppliers and international organisations to all blockchains.
Burlcore Mining Company Ltd. is a dynamic and responsible gold mining company based in Busia, Uganda. They are dedicated to transforming the mining industry by prioritizing safety, respect, and sustainability. With over 15 years of experience in East Africa, Burlcore has acquired a gold mine in Busia and established strong relationships with the local community. They believe that mining precious metals can be a positive force for good, and they work closely with the community to create lasting impacts.
Burlcore Mining is working with Chainlink Oracles to systemise their proof of reserve reporting for investors. You can read more about the Chainlink's POR system here.
Chainlink has a saying: “Proof, not promises.” As a result, their proof of reserve feeds are available to all, which you can view here
The goal of the partnership between Burlcore and Chainlink is to bring transparent audits of Burlcore's gold reserves to all investors. Investors will be able to keep track of the gold reserves that Burlcore holds thanks to the audit and oracle technology that Chainlink has made available.
As per their website, Chainlink provides reasoning as to why platform partnerships are necessary and is a partnership that will benefit all Burlcore investors:
“Within the blockchain space, proof of reserves is commonly known as an independent audit that enables centralized exchanges to publicly attest to the value of their reserves and prove their solvency. Because centralized third parties typically conduct these audits, they can be lengthy, opaque, and time-consuming manual processes.
Chainlink Proof of Reserve (PoR) builds upon this concept to provide a customized solution for Web3. It enables seamless, decentralized, and autonomous proof of reserves attestations by verifying collateral amounts and posting that data on-chain. With Chainlink PoR, users have more transparency, updates in real-time, and stronger guarantees around the proof of reserves’ accuracy.”
Chainlink would therefore act as a modern “independent auditor." Investors can keep track of the health of their investments by having access to real-time data feeds on Burlcore's proof of reserves.
This technology, once implemented, will allow Burlcore token holders and investors to keep track of reserves in real-time, giving them a consistent and trusted source of data that they can rely on.