Proof of Reserves: These Exchanges Are Adhering to the New Standard
Proof of Reserves is a technique that crypto exchanges, lenders and other custody providers use to demonstrate their solvency and prove that all investors’ balances are backed 1:1 with assets held on chain.
The push for full Proof of Reserves (POR) was initiated by Binance CEO, Changpeng Zhao, who urged all crypto exchanges to provide a Merkle tree Proof of Reserves to prove they’re not running a fractional reserve.
By using a Merkle tree to encrypt blockchain transaction data, investors can easily verify that the exchange holds their funds both securely and privately. A full merkle tree-based Proof of Reserves should allow anybody to easily audit the total holdings of the exchange and allow investors to verify their specific transactions that contributed to the total balance.to prevent all fund investment but let dive in for better understanding of all investor world wild.
How to Keep Tabs on Proof of Reserves
The landscape of exchanges conforming to the new Proof of Reserve standard is changing rapidly, but most popular exchanges have already pledged to post their Proof of Reserves soon.
Fortunately, you can now easily check whether your exchange has posted proof of its financial reserves directly on its official website page or app.
Exchanges that have made their reserve status transparent will have a section titled “Financial reserves.
Which Exchanges Will Adhere to the New Standard?
Since Binance set the movement into motion on November 10, 2022, many of the most popular cryptocurrency exchanges world wild have pledged to prove their solvency by adhering to the new Proof of Reserves standard.
As of writing, most of these exchanges have provided either a basic audit of their holdings or a full breakdown of their digital wallet’s world wild for all investors. A small number have posted a full auditable merkle tree Proof of Reserves for their cryptocurrency investors.
Some of the most prominent currently include:
Binance
On November 11, 2022, Binance became the first cryptocurrency exchange to post its provisional Proof of Reserves.
In total, Binance holds more than $69 billion in its hot and cold wallets, and it provided the public wallet addresses for six of the 600 assets it supports.
In the weeks ahead, Binance plans to release a full Merkle tree-based Proof of Reserves for its balances, providing peace of mind to users.
Coinbase
The second largest cryptocurrency spot exchange by trading volume, Coinbase was one of the first exchanges to step up to the plate and put customers’ minds at ease by clarifying how they use their funds.The exchange also maintains an audit of its financials, which can be checked at any time. According to a recent report, the exchange ended Q3 2022 with $5.6 billion in holdings.
Kraken
Kraken, the popular US-based cryptocurrency exchange, has been providing Proof of Reserve audits for its client balances since February 2022.
The platform is one of the few cryptocurrency exchanges to aggregate all balances into a Merkle Tree, and then provide a solution to allow users to easily check if their account was audited and included in the snapshot.
Unlike other platforms, Kraken did not post a full public breakdown of its wallets and their balances, but instead simply allows users to check that their funds are safe and accounted for using a simple tool.
Gate.io
Gate.io has always been transparent about its reserves, and previously it published Proof of Reserves that were audited by an independent agency back in May 2020 and October 2022.The platform currently has more than 108% of client liabilities in Bitcoin (BTC) and 104% of the same in Ethereum (ETH).
Bitfinex
On November 11, Bitfinex , one of the longest-running cryptocurrency exchanges posted its Proof of Reserves.
The exchange’s main wallets now hold more than 204,000 BTC and 1.22 million ETH making it among the largest holders for both.
It also announced plans to revive its open-source proof of solvency and custody solution, known as Antani.
Huobi
Despite rumors that the exchange was insolvent, Huobi became one of the first exchanges to provide a full Merkle Tree Proof of Reserves audit.
According to its “inexhaustive overview” of the digital assets it holds in custody, Huobi currently holds around 32,000 BTC, 274,000 ETH and over 800 million in USDT stablecoins.
that been said, always do your research before trusting or investing your money online for digital assets, don’t let Darth Verta showed up on your Finanancial, he will eat it so hard lmao.
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