Balance Proof

A Balance Proof is a cryptographic proof that reveals the exact total balance of an asset owned by the prover.

Unlike Ownership Proof which only proves a minimum threshold, Balance Proof discloses the complete balance while still being privacy-preserving through zero-knowledge cryptography.

This is useful for scenarios like:

• Full transparency audits
• Complete financial disclosure when required
• Verifying exact asset holdings without revealing transaction history
• Settlement protocols that require full balance visibility

Balance proofs are encoded as bech32 strings with the prefix proof:, making them easy to share with other parties.

How it works

When you create a balance proof, the proof demonstrates your exact asset balance without revealing how you acquired it or any transaction history.

It enable third-parties to verify your exact balance of the specified asset at that topoheight.

Topoheight specificity

Balance proofs are created against a specific topoheight because they are validated against the balance ciphertext stored at that topoheight. This means:

• A proof is only valid for the topoheight it was created against
• If you check the same asset balance at a later topoheight, you must generate a new proof
• This ensures temporal integrity and prevents replay attacks

Advantages

• Complete transparency: When you need to prove your exact holdings
• Privacy-preserving: Transaction amounts history and other assets remain hidden
• Temporary validity: Tied to a specific topoheight for freshness
• Easy sharing: Bech32 format for convenient transmission
• No transaction required: Proof generation is local and doesn’t create a blockchain transaction
• Complete assets support: Supports any asset available in the user wallet
• Contract compatibility: Balance Proofs can also be shared to a smart contract for various use cases, as it is directly supported by the protocol

Use cases

Regulatory compliance

A user fully discloses their exact balance of an asset to a regulator without revealing transaction history:

User generates balance proof for 50000 XELIS at topoheight 50000
↓
Shares proof: proof:1qyqszqgpq...
↓
Regulator verifies proof against the ciphertext at topoheight 50000
↓
Verification passes, exact balance confirmed: 50000 XELIS ✓

Insurance or bonding requirement

A service requires exact proof of balance for insurance purposes:

User proof: "I own exactly 1000 XELIS at topoheight 50050"
↓
Insurance protocol verifies proof ✓
↓
User qualifies for service based on proven balance

Audit or financial reporting

An auditor verifies a user’s exact asset holdings at a specific time:

Auditor requests balance proof at topoheight 50100
↓
User generates proof: "exact balance: 2500 XELIS"
↓
Auditor verifies and records exact balance
↓
Transaction history remains private ✓

Multi-asset settlement

Multiple parties reveal their exact balances for a settlement without transaction history disclosure:

Alice: "I own exactly 100 XELIS at topoheight 50100"
Bob:   "I own exactly 50 XELIS at topoheight 50100"
↓
Both proofs verified at the same topoheight
↓
Settlement proceeds with known exact amounts

Limitations

• Complete disclosure: Your exact balance is revealed (cannot partially disclose)
• Temporary validity: Only valid against the topoheight it was created for
• Forward-only: After balance changes (new blocks), you need a new proof
• No backward proof: Cannot use an old proof against a future (or older) topoheight