Source: Cointelegraph
Original: “Goodbye to Blind Trust: How Gate.io Leads the Security Revolution with Excess Reserves?”

In the past three years, the cryptocurrency industry has experienced several "trust earthquakes."

In 2022, the once-dominant exchange FTX collapsed in just a few days, with millions of users' assets instantly wiped out, exposing a series of issues such as senior executives misappropriating user assets and severe reserve shortages. Earlier this year, Bybit was attacked by the North Korean hacker group Lazarus Group. Although the platform ultimately mitigated the losses, the alarm for asset security risks in the cryptocurrency industry was sounded once again.

Against this backdrop, keywords like "reserve transparency," "third-party audits," and "independent asset custody" have become new standards for users when choosing trading platforms.

The Importance of Reserves. Source: Gate.io

Reserve Strength Comparison: Who is the Truly "Well-Stocked" Platform?

Last week, Gate.io released its reserve report for May. The report shows that as of May 8, Gate.io's total reserves reached $10.865 billion, with a total reserve ratio of 128.57%, and excess reserves amounting to $2.415 billion.

The Bitcoin (BTC) reserve ratio is 137.69%, an increase of 2,802 coins from the previous period; the Ethereum (ETH) reserve ratio is 121.36%, an increase of 188,563 coins; and the USDT reserve ratio is 102.63%, an increase of 441.33 million coins. Additionally, the reserve ratios for GT, Dogecoin (DOGE), and Ripple (XRP) all exceed the 100% reserve benchmark, reaching 178.50%, 109.19%, and 116.72%, respectively.

Reserve Coverage: Is it Really 1:1 Fully Reserved?

| Exchange | Reserve Coverage | Notes | |------------|------------------|--------------------------------------------| | Gate.io | 128.57% | Has excess reserves, providing better protection for user funds | | Binance | Around 101% | Covers mainstream assets but lacks detailed disclosure | | OKX | 102% (based on partial assets) | Has not disclosed comprehensive asset-liability details | | Coinbase | Compliant custody of reserves | Publicly traded company under regulation, data compliant but not disclosed in real-time | | Bybit | No specific coverage disclosed | Lacks regular reserve reports |

Although some exchanges have achieved a 100% reserve coverage rate, many platforms often require users to upload addresses or asset details for proof of reserves (PoR), sacrificing privacy for transparency. Gate.io is the only exchange in the industry that simultaneously introduces Merkle Tree and zero-knowledge proof (zk-SNARK) technology.

The core advantage of zk-SNARK is that users do not need to expose their specific asset information to verify that their account assets are indeed included in the reserve data published by the exchange. This means:

Regular audits + authoritative verification: Transparency is not just a slogan, but an action.

In terms of proof of reserves, "whether there is an audit" is far from enough; the key lies in "who audits, how often, and whether it is publicly verifiable." Many exchanges either conduct internal accounting or only reluctantly publish data during crises, lacking a continuous and credible transparency mechanism.

In contrast, Gate.io has a more rigorous and open auditing system:

| Exchange | Audit Frequency | Auditing Party or Method | |------------|-----------------|-----------------------------------------| | Gate.io | Monthly updates | Hacken + GitHub open source | | Binance | Non-fixed | Primarily self-published | | OKX | Once a month | Internal team calculations | | Coinbase | Quarterly reports | Audited by Deloitte and others | | Bybit | No disclosure | None |

This mechanism of "authoritative audit + open-source verifiability + high-frequency updates" not only ensures the authenticity of the data but also allows users to monitor the platform's financial status at any time, effectively eliminating the possibility of opaque operations and hidden risks.

Additionally, it is worth noting that many exchanges' proof of reserves often only covers mainstream assets like Bitcoin and Ethereum, while users actually hold far more than these. Currently, Gate.io is the platform with the widest range of supported assets for proof of reserves in the industry, covering over 100 assets.

For example, Gate.io not only ensures excess reserve coverage for assets like BTC and ETH but also provides the same assurance for emerging assets such as DOGE, XRP, and even some blockchain-based NFT tokens. This diversified asset reserve particularly meets the needs of users looking to diversify their investments across multiple cryptocurrency assets.

Partial Coverage of Gate.io's Proof of Reserves. Source: Gate.io

Conclusion:

The reserves of cryptocurrency exchanges are a core element in ensuring the safety of user assets and the credibility of the platform. Sufficient and transparent reserves not only reflect the financial stability of the exchange but are also key to maintaining user confidence during market fluctuations.

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