OKX Announces Zero Knowledge Proof Solvency Verification, Full Liability Tree Disclosure Upgrades to Proof of Reserves
VICTORIA, Seychelles, 2 March, 2023 - OKX, the world’s second-largest crypto exchange by trading volume and a leading Web3 technology company, today announced it will upgrade its industry-leading Proof of Reserves (PoR) in the coming months to include full liability tree disclosure and zero-knowledge proofs (ZKP) for PoR solvency verification.
The upgrades build upon OKX's current Merkle tree solution to ensure maximum transparency while enhancing customer privacy:
- Full liability tree: This upgrade, effective in the upcoming March PoR report, will enhance transparency by allowing anyone to download the full liability Merkle tree. At the same time, it will maintain privacy regarding account balances by splitting and shuffling every user's balance into several segments (splitting leaf nodes).
- Zero-knowledge proofs: This upgrade, effective in the coming months, is a tamper-proof cryptographic method that allows users to verify all client deposits are accounted for and guarantees solvency by comparing net equity of user assets to exchange reserves.
Haider Rafique, Chief Marketing Officer at OKX, said: "Proof of Reserves is essential to earning user trust, and we're committed to constant innovation to exceed market expectations for transparency. This is reflective of how we approach everything that we do at OKX, and we're grateful for the positive feedback from customers and the broader crypto community so far."
OKX set the industry standard with its monthly publications of its PoR since November, with the most recent showing USD8.6 billion held by the exchange in BTC, ETH and USDT. OKX's next monthly PoR publication will take place on or around the 20th of March.
OKX has published tens of thousands of addresses for its Merkle tree PoR program, and will continue to use these addresses to allow the public to view asset flows. The OKX PoR protocol is open source and available to the public on Github. Additional OKX holdings can be viewed on the OKX Nansen Dashboard.
As part of its commitment to transparency, OKX will continue to publish PoR monthly. For further information, please contact: media@okx.com
What is Proof-of-Reserves?
Proof of Reserves is a report of crypto assets that ensures the custodian (OKX) holds the assets it claims to hold on behalf of its users. OKX uses the Merkle tree (hash tree) to prove this claim in two ways. First, users can find their balance in the tree and prove their assets are held in the total OKX balance. Second, the total OKX balance is compared to the publicized OKX on-chain wallet balance to determine Proof-of Reserves.
What are 'Clean' Reserves?
Assets are considered “clean” in PoR when a third party analysis determines they do not include an exchange's platform token, and are solely made up of high market cap “traditional” crypto assets such as BTC, ETH and USDT. Blockchain analytics firm CryptoQuant monitors PoR across the industry, and found OKX’s assets to be “100% clean.”
This announcement is provided for informational purposes only. It is not intended to provide any investment, tax, or legal advice, nor should it be considered an offer to purchase, sell, or hold digital assets. Digital assets, including stablecoins, involve a high degree of risk, can fluctuate greatly, and can even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition. Please consult your legal/tax/investment professional for questions about your specific circumstances.
