Which of the following methods is used for implementing volume storage encryption in an IaaS environment?

In an IaaS environment, implementing volume storage encryption is best achieved through proxy-based encryption. This method adds a layer of security whereby the encryption and decryption processes occur at the storage proxy level. The proxy handles data encryption before it is sent to the storage service and decrypts the data when it is accessed. This ensures that sensitive information remains protected both at rest and during transit, while minimizing changes required to applications accessing the data.

Proxy-based encryption is particularly effective in cloud environments, where the service provider may not have visibility into the encrypted data, thus maintaining privacy and confidentiality. This method protects entire volumes rather than individual files or sections of applications, making it well-suited for scenarios where complete disk encryption is desired.

Other methods such as application-level encryption or file-level encryption, while also valid forms of securing data, do not specifically focus on entire volume storage nor are they primarily utilized for handling the broader encryption needs of an IaaS setup. Transparent encryption, while it sounds similar, usually refers to mechanisms that automatically encrypt data in use without requiring changes at the application level, which may not be as comprehensive in a specifically managed storage context.