Paper 2021/598

Proof of Assets in the Diem Blockchain

Panagiotis Chatzigiannis and Konstantinos Chalkias


A great challenge for distributed payment systems is their compliance with regulations, such as anti-money laundering, insolvency legislation, countering the financing of terrorism and sanctions laws. After Bitcoin's MtGox scandal, one of the most needed auditing functionalities for financial solvency and tax reporting purposes is to prove ownership of blockchain reserves, a process known as Proof of Assets (PoA). This work formalizes the PoA requirements in account-based blockchains, focusing on the unique hierarchical account structure of the Diem blockchain, formerly known as Libra. In particular, we take into account some unique features of the Diem infrastructure to consider different PoA modes by exploring time-stamping edge cases, cold wallets, locked assets, spending ability delegation and account pruning, among the others. We also propose practical optimizations to the byte-size of PoA in the presence of light clients who cannot run a full node, including skipping Validator updates, while still maintaining the 66.7% Byzantine fault tolerance (BFT) guarantee.

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Publication info
Published elsewhere. Minor revision. AIBlock workshop - ACNS 2021
Diem blockchainsolvency proofslight clients
Contact author(s)
kostascrypto @ fb com
pchatzig @ gmu edu
chalkiaskostas @ gmail com
2021-05-10: received
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Creative Commons Attribution


      author = {Panagiotis Chatzigiannis and Konstantinos Chalkias},
      title = {Proof of Assets in the Diem Blockchain},
      howpublished = {Cryptology ePrint Archive, Paper 2021/598},
      year = {2021},
      note = {\url{}},
      url = {}
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