Proof of Reserve Process

The Proof of Reserve process for ENSC ensures transparency, accountability, and the stability of the peg between the digital asset and the underlying eNaira CBDC reserves. Here's an overview of the process:

1. Reserve Verification: External auditors will regularly verify the reserves of eNaira CBDC held in eNaira speed wallets by partner banks. This verification is conducted through a combination of on-chain and off-chain mechanisms.

2. Smart Contract Interaction: smart contracts on Polygon and other interoperable blockchains interact with the ENSC tokens. These smart contracts play a crucial role in ensuring that the issuance and burning of ENSC tokens are tied to the equivalent amount of eNaira CBDC reserves.

3. Token Issuance: When new ENSC tokens are issued into circulation, we will ensure that the corresponding amount of eNaira CBDC is held in reserve. This one-to-one backing is a fundamental principle of ENSC stability.

4. Public Transparency: We will publish the results of the Proof of Reserve process on our website's transparency page from time to time. This ensures transparency and allows stakeholders, including token holders, to independently verify the reserve status.

5. Custodian Role: As the custodian of the backing asset (eNaira CBDC), ProsperaVest ESG LTD maintains a trusted role, responsible for safeguarding the reserves. This custodian role adds an extra layer of security to the Proof of Reserve process.

6. Risk Mitigation: We are implementing a straightforward and effective approach to risk mitigation, reducing the complexity of audits for both fiat and crypto components. This approach enhances the security, provability, and transparency of the entire Proof of Reserve process.

The Proof of Reserve process establishes confidence in the stability and reliability of ENSC, ensuring that the digital asset remains securely pegged to its underlying reserves. Here is a detail of our proof of reserve operations:

1. ProsperaVest ESG LTD issues ENSC via Polygon and bridges to it's interoperable chains therefore all minted, redeemed and existing ENSC including transactional history are publicly auditable via blockchain explorers

· Let the total number of ENSC minted be denoted as ENSCminted

· Let the total number of ENSC redeemed be denoted as ENSCredeem

· Let the total number of ENSC in circulation at any time be denoted as Total ENSC

¨ Total ENSC = ENSCminted - ENSCredeem

2. ProsperaVest ESG LTD has an eNaira speed wallet housed in partner banks that will receive and send fiat Naira/eNaira to users who purchase/redeem ENSC directly with us.

· Let the total amount deposited into account/eNaira speed wallet be denoted as eNairaDepo

· Let the total amount withdrawn from this account be denoted as eNairaWithd.

· Let the fiat/eNaira balance of the speed wallet be denoted as Total eNaira.

¨ Total eNaira = eNairaDepo – eNairaWithd.

3. Each ENSC issued will be backed by the equivalent amount of currency unit (one ENSC equals one eNaira). By combining the above crypto and fiat accounting processes, we conclude the “Solvency Equation” for the ENSC System.

· The Solvency Equation is simply Total ENSC = Total eNaira.

· Every ENSC minted or redeemed, as publicly recorded by the blockchain explorers will correspond to a deposit or withdrawal of funds from the bank account.

· The provability of Total ENSC relies on the blockchain as discussed previously.

· The provability of Total eNaira will rely on several processes:

¨ We publish the bank account balance on our website’s Transparency page.

Professional auditors will regularly verify, sign, and publish our underlying bank balance and financial transfer statement.