Proof of Reserves: The Future of CEX Transparency
• Blockchain Economy Summit focuses on the future of centralized exchanges (CEXs) in the wake of FTX collapse
• OKX leads industry transparency efforts with Proof of Reserves (PoR) technology
• PoR technology verifies user funds, offers cheaper alternative to audits and plans to utilize ZK-Snarks in 2023
Crypto Exchange: Proof of Reserves is Future of CEX Industry
The UK’s largest gathering of crypto and blockchain companies, Blockchain Economy Summit, recently took place in London. The debate centered around the future of centralized exchanges (CEXs) after the collapse of FTX. OKX Managing Director Lennix Lai opened the conference with a presentation about increasing transparency in the CEX industry with their Proof of Reserve (PoR) technology.
Increasing Transparency With PoR Technology
Lai discussed how blockchain could provide a new financial system for humanity. To achieve mass adoption, regulators must be able to trust the industry – which requires more transparency. OKX has developed PoR technology that uses Merkle Tree data structures to verify a user’s funds and check them against on-chain snapshots of wallet addresses. This allows for verifying 1:1 CEX reserves as well as revealing the exact total balance on an exchange.
Cheaper Alternative Than Audits
Proof of Reserves eliminates expensive hit-or-miss audits that have traditionally been used for increased transparency. According to Lai, this technology is far cheaper and more efficient than any audit method out there. Furthermore, it is planned that OKX will further develop PoR utilizing ZK-Snarks by 2023 – making this model increasingly more common across various industries.
$8.6bn In Reserve Over Past Four Months
As part of his demonstration at BEconomy_HQ, Lai revealed that OKX has $8.6bn in reserve over past four months alone – proving its effectiveness at verifying user funds and increasing trust between users and exchanges alike.
Conclusion
OKX’s innovative Proof Of Reserve technology is helping to promote increased trust between exchanges and users while providing a cost effective way to increase transparency across multiple industries worldwide. As this technology continues to gain traction within the CEX industry, it may become an industry standard in no time at all!
