After the collapse of the exchange FTXthe famous site for analyzing the prices of cryptocurrencies, CoinMarketCapdecided to add a new dashboard that will display the liquidity reserves of trading platforms, the so-called Proof of Reserve (PoR).
Thus, since the end of November, all the exchanges have run to do their own audits to show the liquidity of their platforms by showing the total activities and addresses of the wallets, together with the balance and value of the wallets. It was one of the first exchanges to publish its Proof of Reserve Binance, since, among other things, it is the company that owns CoinMarketCap.
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Then it was time to KuCoin, Crypto.com, Bitget and many more.
About that, Gracy Chen, CEO of Bitget, commented: “Bitget is actively responding to market concerns and even before FTX filed for bankruptcy on November 9, we had already promised to release our Merkle Tree Proof-of-Reserves within a month. Today we are proud to keep our promise. The release of Proof of Reserves and Merkle Tree data provides users with up-to-date and informative insights into Bitget’s financial status and greater control over their assets deposited on the platform, echoing our commitment to maximum transparency and protection policies of the highest level for users.”
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The exchange data was reviewed by Mazars Group, a leading international firm in the auditing, tax and consultancy sector which employs more than 44,000 professionals in over 90 countries. But some exchanges, to give their users more information, have also published more audits. As in the case of Bitget, which also had its funds controlled by the Nansen Portfolio company.
And what is good in this case is that the user can easily and independently check the value of the tokens held as reserves in the public wallets of the exchanges.
What is Proof of Reserve
The Proof of Reserve is a standard that provides concrete proof of possession of declared reserves. As early as 2019, the blockchain company Blockstream had released a tool for exchanges to show their decentralization in their reserve statements, but now it becomes even more important at a time when transparency is even more requested by users. Indeed, after the collapse of FTX, the entire crypto-market suffered price dumps and obviously users are worried about their funds too.
Not for nothing, in recent months exchanges in general have been emptied (we are talking about over 91,363 bitcoins in November) and non-custodian wallets such as Ledger have increased their sales. And it is therefore for this reason, obviously, that exchanges are working to provide more data in a clear and immediate way.