Here’s Crypto Exchange That Has Published Theirs Proof of Reserves

Since FTX went bankrupt, many crypto exchanges have published their proof-of-reserves, including liabilities.

Crypto Exchanges Creating Proof of Reserves

In response to the collapse of the FTX, Changpeng Zhao, CEO of Binance, recommended that all exchanges provide Merkle-tree proof of reserves.

“All crypto exchanges should do merkle-tree proof-of-reserves. Banks run on fractional reserves. Crypto exchanges should not. @Binance will start to do proof-of-reserves soon. Full transparency,” he tweeted. 

All crypto exchanges should do merkle-tree proof-of-reserves.

Banks run on fractional reserves.
Crypto exchanges should not.@Binance will start to do proof-of-reserves soon. Full transparency.

— CZ 🔶 Binance (@cz_binance) November 8, 2022

Read More: Binance CEO CZ Suggests Inexperienced Investors To Not Jump Into Crypto Market In The Near Future

Kraken, Coinbase and Gate.io were among the first exchanges to publish proof-of-reserve reports.

Huobi, a cryptocurrency exchange based in the Seychelles, became the latest cryptocurrency exchange to release the “proof of reserves” on Nov. 12.

In the form of a verifiable audit, Proof of Reserves (PoR) seeks to provide public transparency about centralized cryptocurrency reserves.

Meanwhile, recently, Binance, Crypto.com, and OKX have all created dashboards on Blockchain data platform Nansen, which has become an in-demand platform for proof of reserves.

Enhancing the transparency

Crypto asset users can verify real assets are backing their balances on exchanges using Proof of Reserves (PoR).

As part of the process, a sophisticated cryptographic accounting procedure is used based on the Merkle tree, a data structure specifically created to maintain privacy.

Considering that point-in-time attestations are easy to manipulate, and cash flow analysis alone cannot account for everything (including unaccounted liabilities), a POR becomes more necessary.

This helps crypto exchanges gain the trust of users by providing a clear picture of held balances.

Read More: Why Mark Cuban Says Crypto Is Actually Already Regulated 

“That’s the way to go to avoid the most vicious threat on #Bitcoin = paper bitcoin. Proof of reserves is the first good move 👌The 2nd one will be to avoid any plateformes that do not implement a mecanism to verify the real supply on their balance sheet,” said one twitter user. 

That's the way to go to avoid the most vicious threat on #Bitcoin = paper bitcoin

Proof of reserves is the first good move 👌

The 2nd one will be to avoid any plateformes that do not implement a mecanism to verify the real supply on their balance sheethttps://t.co/2AB3jVF59m

— Crypto Révolution 🇫🇷 (@CryptoRevoltFR) November 8, 2022

Another user also supports transparency by providing the PoR, saying “Hopefully we continue to see a wide range of transparent exchanges. What happened today was needed, but in the long run we want less and less centralization. Competition is healthy.”

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