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    OKX launched "proof of reserves page", with self auditing intros

    Tanya Sharma
    Nov 24, 2022 06:42
    The exchange is also introducing an Independent Custodial Wallet, which enables institutional clients to hold the keys to their money and secure their assets independently from the exchange's reserves.
    OKX launched "proof of reserves page", with self auditing intros
    Source: Financial IT

    OKX introduced three new industry-leading products

    OKX, the second-largest cryptocurrency exchange in the world by trading volume and a pioneer in the web3 ecosystem, has introduced three new industry-leading products that give its retail and institutional users better access to information about their assets and the sources of those assets, as well as more control over their money.

    The new Proof of Reserves (PoR) page on OKX's website went live today. This page shows that OKX has always maintained 1:1 reserves and explains the significance of PoR.

    The page offers instructions, including how users may confirm that their assets have turned into a "Merkle leaf" in the Merkle tree data structure and information on how proof of reserves functions.

    The page also includes data on OKX's most recent reserve ratios for all of its tokens and information on PoR audits.

    OKX self-audit tool supports Tether (USDT), Ethereum (ETH), and Bitcoin (BTC)

    This week, OKX will introduce a self-audit function that will allow users to confirm that their money is backed by reserves using information from the most recent snapshot, furthering transparency and user empowerment.

    The self-audit tool now supports Tether (USDT), Ethereum (ETH), and Bitcoin (BTC), with other assets expected to be added in the future.

    To keep track of the status of its user assets and the number of its reserves, OKX will undertake routine proof of accounts audits.

    OKX will introduce the Independent Custodial Wallet service for institutional and high-net-worth clients as the first exchange.

    Lennix Lai, Director of Financial Markets at OKX, stated:

     "With the help of our brand-new self-audit tool and proof of reserves page, users can now confirm that their assets are completely backed. In addition, independent audits by third parties are being carried out to offer more assurance. For our industry to recover more quickly from recent events, a much higher level of transparency is necessary.

    OKX announced the new page in a tweet and on its blog,

    Why Is Reserve Proof Important?

    To constantly assure the security and safety of money, through Proof of Reserves, OKX continuously maintains 1:1 reserves also while providing greater transparency than ever before.

    Users' funds are always backed 1:1 by tangible assets because of the public nature of their on-chain wallet holdings. They frequently issue Proof of Reserve audits to make it simple for users to confirm that their investments are securely maintained in OKX reserves.

    How does it function?

    A typical audit technique known as "Proof of Reserves" confirms that a custodian has enough money to cover all assets housed on their exchange.

    The audit can be verified in three ways:

    1) To verify all user assets held on the exchange, OKX employs a "Merkle tree" verification technique, a data structure made to encrypt data securely.

    2) They confirm that they are the proprietors of the OKX on-chain wallet addresses and the total holdings in OKX wallets.

    3) To verify their reserve ratio, they compare the total user asset holdings with the total exchange assets from our on-chain wallet addresses.

    How can I check my Proof of Reserves?

    Check to see if your possessions are listed in the OKX Merkle tree.

    1. Log into your OKX account, click "Audits" to view recent audits, then select "Details" to view your audit data to see if the asset balance of your account has been included as a Merkle leaf.



    1. By following the instructions in our article, you may also confirm the assets you have in the Merkle tree. Click "Copy data" to obtain the information you require for verification.




    1. Once you've clicked "Copy data," paste the data where it needs to be and save it as a json file. Then launch the free OKX verification application "MerkleValidator." Your assets are included in the Merkle tree snapshot if the data can be verified.

    2. If the verification process is successful, the message "Merkle tree path validation passed" will appear as follows:

     

    1. If verification is unsuccessful, the following message will be displayed: "Merkle tree path validation failed."

    Proof of Reserves pages are required to avoid FTX-like hazards

    According to this overview, OKX presently has 101% of the USDT required to service all Tether withdrawals, while it has 102% of the BTC and ETH needed to handle all withdrawals in these coins.

    From November 7 to 11, the cryptocurrency exchange FTX unexpectedly faced a liquidity shortage, which prompted the firm that operated it to file for bankruptcy.

    Related: The Market Mood swings: Revisiting the FTX Fiasco

    Several CEOs of significant cryptocurrency exchanges have stated that Proof of Reserves pages are required to give transparency to ensure that an incident like this never occurs again in response to this occurrence.

    In the past, OKX promised to deliver the Proof of Reserves "asap."

    Kucoin and Binance announced their intention to offer Proof of Reserves in the coming weeks.