- OKX maintained a reserve ratio of more than 100%.
- OKX clocked the second-largest crypto spot volumes in the last 24 hours.
Prominent exchange OKX [OKB] published its 12th consecutive Proof of Reserves (PoR) report recently, marking a year of transparent reporting since the collapse of FTX exchange.
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The latest report showed that the Seychelles-based trading platform held assets worth $12.5 billion in some of the major cryptos like Bitcoin [BTC] and Ethereum [ETH], giving it a reserve ratio of more than 100%.
The importance of transparency
PoR refers to an auditing practice to verify that a custodian, in this case centralized crypto exchanges, has sufficient funds to back all customer deposits. It is an important barometer to prove the solvency of the trading platforms.
While users access these platforms for crypto trading, they don’t have control over their funds. Instead, the exchange has ownership of the private keys, and therefore any crypto at any address on its platform.
Put simply, if the exchange goes bust, users lose their funds. Perhaps the ugliest manifestation of this came during the implosion of FTX last year.
Since then, OKX has been consistently revealing the state of its reserves in order to assuage its user base. To its credit, it has maintained a reserve ratio of 100% and more for all assets in its custody. This also meant that the exchange was in a position to honor withdrawals at any given point of time.
To build an additional layer of trust, OKX helped users to independently cross verify the data using zero-knowledge, open-source tools.
Apparently, the concept of PoR reports has been well received by market participants. As per an X poll run by OKX in August, an overwhelming majority of the respondents thought monthly PoR reports were very important.
OKX Global Chief Commercial Officer Lennix Lai told AMBCrypto,
“Proof of Reserves has become one of the top factors users consider when choosing a crypto platform, and competition between exchanges to push each other forward, add features, and stay current can only help the industry as a whole.”
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In response to a query on whether such practices could help to reverse the growing popularity of self-custodial wallets, Lai stated,
“We are dedicated to provide the best products and services, no matter whether a user prefers self-custody or exchange custody.”
According to CoinGecko, OKX was the second-largest crypto exchange in the last 24 hours, recording spot volumes of $1.3 billion.