- OKX has published its third monthly Proof of Reserves (PoR) report, disclosing $7.2 billion held by the exchange.
- According to data from blockchain analytics firm CryptoQuant, OKX has the largest clean asset reserves among major exchanges.
- OKX is overcollateralized with a reserve ratio of 105% for BTC, 105% for ETH, and 101% for USDT. Users are further able to self-verify the exchange’s reserves and liabilities
OKX, a renowned crypto exchange, has released its third monthly Proof of Reserves (PoR) report. It discloses $7.2 billion held in its wallets, consisting of Bitcoin (BTC), Ethereum (ETH), and USDT. Data from CryptoQuant suggests that OKX has the highest volume of clean asset reserves among major exchanges.
What Is Proof of Reserves?
PoR is a method of verifying that a trading platform or crypto firm has 1:1 backing across the digital assets it holds in custody on behalf of customers. The crypto community has been pushing for exchanges to provide attestations of their holdings in the wake of the FTX collapse last November.
One way to execute an attestation is via a PoR protocol that uses a Merkle Tree proof to integrate large amounts of data into a single hash to verify the integrity of the data set. OKX was among the first to utilize this method to prove its stability. The exchange released two PoR reports by the end of December.
OKX explains that asset reserves are considered “clean” when a third-party analysis determines the reserves do not include an exchange’s native token and are made up exclusively of high-market cap “traditional” cryptocurrencies such as BTC, ETH, and USDT.
CryptoQuant reveals that Deribit is the only exchange with 100% clean assets reserves, although for a much lower volume of $1.4 billion. Crypto.com, ByBit, and Binance are 95.51%, 91.2%, and 87.6% “clean,” respectively. The previously mentioned exchanges have a portion of their reserves stored in their own tokens, which are not deemed “clean collateral.” This has resulted in a decrease in their ratings.
A Breakdown of OKX’s Assets
New features in today’s report include a detailed breakdown of the assets. This demonstrates that OKX is overcollateralized with a reserve ratio of 105%, 105%, and 101% for BTC, ETH, and USDT, respectively. As of January 18, 2023, users of OKX held 117,682 BTC, 1,178,993 ETH, and $2,955 million USDT.
OKX has published over 23,000 addresses for its Merkle Tree PoR program. It has also enabled users to self-verify the exchange’s reserves and liabilities with trustless tools on the OKX website. The exchange’s additional holdings can be viewed on the OKX Nansen Dashboard.
Transparency and Security
OKX’s director of financial markets, Lennix Lai, said the exchange “has never misappropriated user assets before and never will.” To provide more transparency and avoid scenarios similar to what happened at FTX, the crypto exchange is also planning to use zero-knowledge proof (ZKP) technology.
Boasting a trading volume of over $1.8 billion in the past 24 hours, OKX is the third-largest cryptocurrency exchange globally at the time of this writing, according to CoinGecko.
On the Flipside
- While OKX claims to have the largest clean asset reserves among major exchanges, its competitors have different reporting methods and measuring their assets.
- OKX’s use of zero-knowledge proofs may be seen as a proactive measure for increased transparency. However, other exchanges may have different security measures in place.
- Despite the statement made by OKX’s Lennix Lai, it’s important to note that past performance does not guarantee future results.
Why You Should Care
PoR has received increased attention following the FTX fallout, and regular releases of PoR reserves can enhance transparency. It is important to be aware that these reports may not offer a full understanding of crypto firms. As such, it is recommended to research and verify any information before engaging with a crypto firm.
Further Reading:
OKX to Publish Proof-of-Reserves Every Month, Unveils Self-Verification Feature
OKX Fails to Process Transactions for Over a Day as Intermittent Outage Hit Alibaba (NYSE:BABA) – DailyCoin