“Ensuring trust and transparency: Umbrella Network and Surfer Monkey join forces to provide a cutting-edge Proof of Solvency Solution”

Umbrella Network Team
Umbrella Network
Published in
3 min readFeb 21

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Umbrella and Surfer Monkey partner to develop blockchain-based proof of solvency solution for centralized exchanges.

The recent FTX situation has brought increased attention to the importance of transparency in centralized entities, particularly in the exchange industry.

As users demand more accountability and security from these platforms, there is a growing need for innovative solutions to ensure that exchanges are trustworthy and solvent. A blockchain-based proof of solvency solution would help exchanges achieve this goal.

What is Solvency?

In general terms, if a company’s treasury exceeds its balances plus the short term debts, this entity should be solvent.

To prove solvency, three things are necessary:

  • Publicly available information on user account balances that correspond to the total value of assets the exchange holds on behalf of the users. This information should be publicly available for any user to confirm their account has been included in the Proof of solvency equation.
  • Non-public information on exchange liabilities. Corresponding to the short term debts the exchange needs to pay off.
  • Non-public information on the exchange treasury. This information should consider all liquid assets the exchange may use to respond to user withdrawals and to cover for the short term debts. It includes, but it is not limited to, crypto assets and traditional bank reserves in fiat.

The challenge is to demonstrate solvency without disclosing sensitive company information in the process.

In order to create a viable Proof of Solvency solution, Umbrella is partnering with Surfer Monkey.

Umbrella has a wealth of experience in Merkle Tree technology and securing data on-chain. Surfer Monkey are experts in Zero Knowledge Proofs (ZKP), which can be used to keep sensitive information private.

Through a combination of both tech, Umbrella together with Surfer Monkey will look to explore a concept that can provide transparency, accountability and privacy. The aim of this collaboration is to establish a universal standard for user balance verification, while also providing privacy customization options for each exchange.

Umbrella’s product owner, Eugenio Di Santo, says:
“This partnership with SurferMonkey will allow Umbrella Network to gain expertise in ZKP technology, while reducing the timeline for delivering the Proof-of-Solvency solution to the market.”

Miguel DM, Co-founder & CEO of SurferMonkey :

“Collaboration is key in achieving a more transparent accounting system for Central Exchanges. With our partnership with Umbrella Network, we can explore more use cases where privacy is a major concern, such as in Central Exchanges accounting. By leveraging Zero Knowledge Proofs and network distribution, SurferMonkey and Umbrella Network are committed to achieving this vision of a more secure and transparent future.”

Both teams are excited about the prospect of creating a vital solution for the industry. Centralized exchanges are still the entry point to the blockchain economy and a universally usable and customizable Proof of Solvency solution could help bring trust back and continue the positive growth of the blockchain ecosystem.

Want to learn more about Proof of Solvency?

Check out our previous articles here:

The importance of Proof of Reserves: https://medium.com/umbrella-network/the-importance-of-proof-of-reserves-a2df9072dbf8

Does proof of reserve guarantee transparency?https://medium.com/umbrella-network/does-proof-of-reserve-guarantee-transparency-8a361103d837

About Umbrella Network

Umbrella Network is a scalable, decentralized, and community-owned data oracle that utilizes Layer 2 technology to integrate real-time data into smart contracts. Umbrella Network is able to aggregate data to bring onto the blockchain, enabling faster, more cost effective delivery of information at scale. It believes a decentralized oracle is paramount to creating a truly decentralized blockchain ecosystem space.

About Surfer Monkey

Surfer Monkey is an early-stage startup based in the UK. Its mission is to deliver a game-changing privacy ecosystem for all EVM blockchains. Its innovative protocol empowers developers to build a wide range of applications that provide privacy to their users, spanning single and cross-blockchain systems, while complying with financial regulations at a protocol level. Surfer Monkey’s ultimate vision is for its protocol to become a regulatory global standard for private DeFi transactions.

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Umbrella Network Team
Umbrella Network

Product marketing at Umbrella Network