Crypto exchange OKX has published its sixth proof-of-reserves (PoR) report. The company started this procedure in November 2022 with the intention of increasing the level of openness within the sector after the FTX collapse.
This most recent release also comes as the exchange has enhanced its PoR system by publicly making total liabilities (the entire sum of customer deposits) available.
The new transparency mechanism that produced the entire amount of user deposits accessible to the public still maintains user privacy, even though it made the current sum of user deposits visible to the public. This is accomplished by splitting and shuffling account liabilities in the tree using a solution known as splitting leaf nodes.
Lennix Lai, managing director of Global Institutional at OKX, told Cointelegraph that more than 300,000 users have examined the reserves or confirmed their obligations inside the OKX ecosystem.
According to Lai, OKX, whose previous reserve audits have been met with many questions, will add zero-knowledge evidence to our Proof of Reputation during the next few weeks.
Since the FTX crisis, several cryptocurrency exchanges, including Binance, Crypto.com, and Bybit, have published Merkle-Tree-based verification proofs to maintain the industry’s reputation for trustworthiness.
During the FTX issue, several cryptocurrency exchanges, notably Binance, Crypto.com, and Bybit, have produced verification proofs based on Merkle Trees to keep the industry’s reputation for reliability intact.
With the failure of Silicon Valley Bank (SVB), more transparency in the financial sector has become an even more prevalent topic of discussion.
Traditional finance is distinguished from cryptocurrency in that proof of reserves may give customers real-time, on-chain verification of reserves and liabilities using transparent technology.
On the other hand, investors were warned regarding PoRs by the Public Company Accounting Oversight Board (PCAOB), a watchdog organization in the United States that oversees audits of public corporations. These reports, according to the board, “do not give any meaningful assurance to investors or the public.”
Despite this, businesses operating in the cryptocurrency market continue their attempts to improve their transparency. Binance improved its Proof of Reputation mechanism on February 10, now supporting zk-snarks.