The FTX debacle is already causing a lot of changes within the industry. One of the things you hear a lot about in the crypto industry right now is the so-called Proof-of-Reserves. OKX is the next crypto exchange to start this phenomenon and users of the platform can now easily check their own funds.
🚨 Don’t trust, verify → OKX Proof of Reserves (PoR) is LIVE. 🚨
To set a new standard of transparency, risk management and user protection, we’re launching our first PoR.
You can now verify your assets are backed 1:1 on #OKX ⤵️
Details 🧵👇
— OKX (@okx) November 23, 2022
What is Proof of Reserves?
Proof-of-Reserves is simply a way in which an exchange platform can prove that they actually have all user funds in house. Thanks to blockchain technology, users can verify that their specific bitcoin or other crypto is included.
You can do this in two ways at OKX. With the first option you can get an overview of the top three coins on the platform. For bitcoin (BTC), ethereum (ETH), and tether (USDT), you can see how many coins are in the exchange’s wallets and how much they owe their users.
In the overview, we can see that OKX currently holds 102 percent of all Bitcoin and Ether needed to cover all customer assets. When it comes to USDT, that percentage is 101 percent. The second option is “view my audit”, with which you can specifically check whether your bitcoin, ether or USDT are present at the platform.
Crypto exchange provides instructions
Even if your technical aptitude is not enough to verify this yourself, OKX has created an instruction document that anyone can use. This way you can be sure that the exchange really has your funds in the wallets. To arrange this, OKX works with a so-called Merkle Tree.
In fact, this is a tree that contains all the assets of the platform. You can then cryptographically verify your Merkle Leaf. A Merkle Leaf stands for a leaf in the tree with which you can cryptographically verify that your assets are in the tree. Lennix Lai of OKX is in any case enthusiastic about this development.
“Our new Proof-of-Reserves page and the ability for clients to review individual assets proves that all assets are 100 percent covered. […] We believe this brings a higher level of transparency to the industry.”