Crypto exchange OKX has released a Proof of Reserves page that allows users to audit its reserves to make sure it is solvent. This comes at a time when crypto exchanges are coming under greater scrutiny after the collapse of FTX. OKX announced the new page on its blog.
Why Proof of Reserves matters
Our greatest responsibility and number one priority is to ensure your funds are safe and secure at all times. We always maintain 1:1 reserves and pride ourselves on our long standing reputation for best-in-class security. Now, we're empowering you with greater transparency than ever before through Proof of Reserves (PoR).Our on-chain wallet holdings are public, so you can always verify that users' funds are backed 1:1 by real assets. We also regularly publish Proof of Reserve audits, making it easy for you to verify your assets are safely held in our reserves.
How does it work?
Proof of Reserves is a common audit method used to ensure a custodian holds sufficient funds to cover all assets held on their exchange.There are 3 key steps to verify the audit:1) We use a verification method known as a "Merkle tree", a data structure designed to encrypt data securely, to verify all the user assets held on the exchange.2) We verify our ownership of OKX on-chain wallet addresses and the total OKX wallet holdings.3) Finally, we verify our reserve ratio by comparing total user asset holdings with total exchange assets from our on-chain wallet addresses.
How to verify whether your assets are included in the Merkle tree
A snapshot is taken of all eligible users' Trading, Funding, and Grow accounts, and each user is given a unique anonymous user hash ID. Each user's total asset balance becomes a "Merkle leaf" in the tree. Combining the total sum of all our user's assets produces a "Merkle root", a cryptographic signature that represents all user holdings.The Merkle tree is a binary hash tree designed to uncover any manipulation or data tampering. If there are changes to user assets, they will be reflected in the Merkle root. This mechanism ensures the complete accountability of data.
How to verify the ownership of OKX's wallet address and assets
We published a list of wallet addresses where you can check the OKX assets stored on-chain. These addresses contain a signed message, "I am an OKX address", which confirms our ownership. You can then use third-party or open-source "VerifyAddress" tools provided by OKX to verify our ownership.
How to verify the OKX reserve ratio
Compare the total assets held in OKX's on-chain wallets with total user assets from the Merkle root.If our total on-chain asset balance is greater than or equal to total users' asset balance, then the reserve ratio will confirm OKX has Proof of Reserves.
Note: audit result is a snapshot of our user asset balances at the time of audit. Any subsequent transactions after the snapshot time, or coins out of auditing scope are not included.
How to self-verify Proof of Reserves?
Verify if your assets are included in the OKX Merkle tree
- To verify if the asset balance of your account has been included as a Merkle leaf, log in to your OKX account, visit "my audit" to view recent audits, click "Details" to view your audit data.
- You can also verify your assets in the Merkle tree by following the steps in our guide. Get the data you need for verification by clicking "Copy data".
- After clicking "Copy data", paste and save the data as a json file, then run the open-source OKX verification tool "MerkleValidator". If the data can pass verification, your assets are captured in our Merkle tree snapshot.
Verify OKX wallet address ownership and balance
Verify the ownership of our publicized list of designated crypto wallet addresses. We will share the crypto type, amount, signature and sign a message "I am an OKX address" with the corresponding private key. Use third-party verification tools or OKX's VerifyAddress.Using BTC as an example, follow these steps:
- Download the latest publicized wallet address information using this link, then download the OKX open-source verification tools from github to begin the verification process.
- Open the downloaded file and copy the highlighted information from the image below. The BTC address, signature and message must be copied separately.
- Paste the information into a third-party signature verification tool. Verify both the address and signature. If the verification passes, it means OKX owns the address.Third-party tools can only verify ownership one address at a time. If you want to verify the ownership of all OKX addresses at once, use OKX's VerifyAddress tool.
- Use the tool CheckBalance to verify the OKX wallet address balance with the corresponding block height snapshot.
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