Proof of Reserves (PoR)

Proof of Reserves (PoR) is a transparency system that cryptocurrency exchanges use to openly verify they maintain enough funds to cover all customer balances. It cryptographically ensures that an exchange’s reserves are equal to or greater than the total balance owed to its users. PoR was created to establish trust, accountability, and financial security in the crypto world.

In a way, PoR allows us to confirm that an exchange isn’t too over-leveraged or engaging in some form of fractional reserve banking, where they promise users more assets than they currently possess. This way, users can verify their funds are safe and the exchange is not operating in a state of insolvency.

Benefits of Proof of Reserves

1. Increased transparency: PoR provides users with clear evidence that their funds are fully backed, fostering trust between the exchange and its customers.
2. Fraud prevention: PoR mitigates the risk of exchanges behaving in a fraudulent or risky manner (e.g., lending out customer deposits without customer consent).
3. Regulatory compliance: In locations with increasing regulation, PoR can be a preventative measure to meet transparency standards and preempt regulatory confrontation.
4. Reputation management: Since high-profile exchange failures – such as FTX – introducing PoR has been a way for exchanges to stand out and maintain good faith with users.

 

Crypto Exchanges Supporting Proof of Reserves (PoR)

• Binance (Binance was founded in 2017 by Changpeng Zhao (known as CZ) and has since become the most popular and technologically advanced cryptocurrency exchange in the world.).

• Bybit (Bybit is known among the crypto community as an exchange that often holds promotions and gives out rewards.).

• OKX (OKX is user-focused first and foremost. They relied on maximum convenience and speed of the exchange, and OKX does this very well. In addition, OKX has its own and very convenient decentralized wallet to store tokens securely.).

• MEXC (MEXC is an exchange with the best conditions. Low trading commissions, frequent promotions, no KYC when withdrawing up to 10 BTC per day.).

• Kucoin (Popular exchange, operating since 2017. In our opinion, Kucoin is the crypto exchange with the most user-friendly user interface we have ever seen.).

• Gate.io (Gate.io, established in 2013, is one of the most comprehensive cryptocurrency exchanges in the market today.).

• HTX (Huobi) (HTX is a trusted crypto exchange that has been operating since 2013 and has over 47 million users worldwide.).

• BingX (Founded in 2018, BingX has emerged as a popular cryptocurrency exchange, particularly known for its copy trading features and versatile trading options.).

• CoinEx (The CoinEx cryptocurrency exchange was founded in Hong Kong in 2017. Today, it serves over 10 million users worldwide, which speaks to its reliability and popularity.).

• Bitfinex (Founded in 2012, Bitfinex is one of the oldest cryptocurrency exchanges, offering a wide array of advanced trading features.).

• Bitmart (Founded in 2017, BitMart has grown to become a prominent global cryptocurrency exchange, offering services to more than 9 million users across 180+ countries.).

Proof of Reserves (PoR) is an important step towards trust and transparency in this wacky world of digital currencies we've found ourselves in. PoR comes in response to the request of users who want more transparency about the solvency and the safety of their funds. Though not without challenges, such as incomplete liabilities disclosure, PoR has effectively become a lifeline for exchanges attempting to maintain credibility and appeal to users.