This week, the OKX crypto exchange published its third monthly report of Proof-of-Reserves (PoR), which showed that it has $7.2 billion in Bitcoin (BTC), the USDT stablecoin, and Ethereum (ETH).
The crypto industry’s proof-of-reserves (PoR) is monitored by CryptoQuant. OKX cited data from the blockchain analytics firm and said that it is the biggest clean asset reserves in prominent crypto exchanges.
OKX explained that asset reserves are deemed ‘clean’ when analysis from a third party determines that the native token of exchange is not included in its reserves and they comprise of ‘traditional’ cryptocurrencies with a high market cap.
In this case, it is the analysis from CryptoQuant that helps the exchange prove that its assets are clean. The data of the blockchain analysis firm also shows that another exchange that has 100% clean assets is Deribit.
However, its reserves are of a lesser value at $1.4 billion. Meanwhile, Crypto.com, ByBit, and Binance are other exchanges that have clean reserves, but not 100%.
They have 95.51%, 91.2%, and 87.6% clean reserves, respectively. This is because each of these exchanges has used their native tokens for maintaining a percentage of their reserves.
The purpose of Proof-of-Reserve (PoR) is to verify that a crypto company, or a trading platform, possesses 1:1 backing for the digital assets in its custody deposited by its clients.
There has been a rising demand in the crypto community for crypto exchanges to provide proof-of-reserves after the collapse of the FTX crypto exchange back in November.
One of the first crypto exchanges that opted to use the PoR method for proving its stability was OKX and it had already published two reports by December.
The latest report provides a detailed breakdown of the digital assets of the exchange, as it shows that it is actually over-collateralized.
The reserve ratio of OKX for USDT is 101%, for ETH is 105% and for BTC it is 105%.
As of January 18th, the total holdings of OKX users on the crypto exchange were 2,955,696,824 USDT, 1,178,993 ETH, and 117,682 BTC.
The crypto exchange further revealed that it had published a total of 23,000 addresses for its PoR program and it also gave users the option of self-verifying the liabilities and reserves on its website via trustless tools.
The additional holdings of the exchange can also be seen on the OXK Nansen Dashboard. Lennix Lal from OKX said that they had never misappropriated the assets of its users and would not do so.
In order to ensure more transparency and to avoid a scenario like FTX, OKX also plans to take advantage of zero-knowledge-proof technology.
According to CoinGecko, OKX is the third largest crypto exchange in the market because it has a trading volume of about $1.8 billion in 24 hours.
The PoR are meant to reassure clients of the crypto exchanges that their digital assets are safe and not being misappropriated, as it turned out in the case of FTX which has billions missing in customer funds.