On Wednesday, popular crypto exchange, OKX joined the list of firms that have embraced transparency after it published its proof-of reserve. The crypto exchange, in its announcement, maintained that it decided to publish its reserve following the lingering crisis rocking similar exchange, FTX. Meanwhile, the publication of this report by OKX comes a few weeks after it promised to avail users with the information.
According to OKX, its greatest responsibility and priority is ensuring users funds are safe and secure at all times. The exchange noted that it maintains 1:1 reserves and pride itself on its long standing reputation for best-in-class security. Further, OKX hinted that through the release of its proof-of-reserves, it has empowered users with greater transparency than ever before.
Additionally, OKX assures users that its on-chain wallet holdings remains public. This, according to the exchange, allows them to verify that users’ funds remains backed 1:1 by real assets. Also, the exchange says it usually publish Proof of Reserve audits regularly. This thus makes it easy for users to verify that their assets remain safe in its reserves.
OKX highlight steps for verifying its audits
Furthermore, OKX highlighted three steps to verifying the audits. First, it uses a verification method known as a “Merkle tree”, a data structure designed to encrypt data securely. It also enables the verification all the user assets held on the exchange. Secondly, the exchange verifies its ownership of OKX on-chain wallet addresses and the total OKX wallet holdings. Lastly, it verifies its reserve ratio by comparing total user asset holdings with total exchange assets from its on-chain wallet addresses.
Also, the exchange explained how users can self-verify its reserve ratio. It asked users to compare the total assets in OKX’s on-chain wallets with total user assets from the Merkle root. According to OKX, if its total on-chain asset balance appears greater than or equal to total users’ asset balance, then the reserve ratio will confirm it has Proof of Reserves.
Notably, the release of POR by OKX comes a day after CoinmarketCap launched a proof-of-reserve tracker for crypto exchanges. L According to CoinmarketCap, the new feature allows users to monitor financial insights of crypto exchanges as it unfolds. Further, CoinmarketCap says the PoR tracker helps to audits functional cryptocurrency exchanges within the sphere. This, according to the tracking firm, helps to promote transparency on liquidity at a given moment.
Meanwhile, OKX with the release of its POR joins the growing list of exchanges publishing their financial statuses. Recall that crypto exchanges, like Binance, Bybit, Bitfinex and a host of others have published their proof-of-reserves.
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