At least 11 mainstream centralized exchanges worldwide have released PoR (Proof of Reserves) reports, aiming to demonstrate solvency by comparing platform reserves with user assets. This is a self-regulatory action taken by centralized exchanges in the absence of unified regulatory oversight.
PoR has improved the information asymmetry between platforms and users to some extent, gradually becoming the default self-regulatory paradigm in the crypto industry. However, the implementation levels vary among exchanges: most still rely on single-point verification, leading to conflicts between privacy and transparency, doubts about the authenticity of liabilities, and difficulties in assessing asset quality. To address these pain points, OKX has built a more credible verification system by introducing zero-knowledge proofs, open-source verification tools, expanding currency coverage, and increasing report frequency. This article will delve into the core pain points of the current PoR mechanism and explore how OKX promotes industry transparency upgrades through technology and process optimization.
Pain Point 1: Limitations of Point-in-Time Verification
PoR is typically based on a snapshot of assets and liabilities at a specific point in time, making it difficult to reflect the real financial dynamics of an exchange. During periods of market volatility or frequent capital movement, such static information is inadequate for users to assess the exchange's immediate solvency, potentially leading to a crisis of trust. For example, the collapse of FTX in 2022 exposed this issue: users suffered significant losses due to the inability to access real-time data. Additionally, some exchanges may temporarily borrow assets before an audit and immediately transfer them out after the audit, creating a false impression of "sufficient assets." Although on-chain tracking is improving identification capabilities, such short-term behaviors severely undermine the credibility of PoR. More critically, many exchanges lack a stable reporting mechanism, and during times of asset strain, they may even suspend report updates, further exacerbating the trust gap.
In contrast, OKX insists on releasing PoR reports monthly, having published over 30 reports, setting an industry benchmark in frequency and consistency. By continuously disclosing the platform's asset status, OKX avoids the formalism of one-time releases or low-frequency disclosures, allowing users to dynamically observe financial trends rather than relying on a single snapshot. This long-term, stable transparency mechanism significantly enhances the practical value of PoR and provides a more referable verification path for building trust in exchanges.
Pain Point 2: Verification Gaps in Data Authenticity and Completeness
While the PoR mechanism can prove that an exchange holds sufficient assets, i.e., platform assets ≥ user deposits (platform liabilities), it cannot guarantee the authenticity and completeness of this data. For instance, under normal circumstances, each user's deposit balance should be positive:
Real Situation:
User deposits (platform liabilities): User A deposits 10,000, User B deposits 20,000
Platform actual assets: 20,000
PoR: 20,000 (platform assets) ÷ 30,000 (platform liabilities) ≈ 67% (insolvent)
Fraudulent Operation:
To fake a 100% reserve ratio, a malicious exchange might fabricate a "negative value account," claiming "User C owes the exchange 10,000."
User deposits (platform liabilities) are manipulated to: 30,000 (platform liabilities) - 10,000 (fabricated "platform liabilities") = 20,000 (artificially reduced liabilities);
False PoR: 20,000 (platform assets) ÷ 20,000 (manipulated platform liabilities) = 100% (seemingly safe).
How does OKX intercept negative value accounts and other forms of data fraud through technical constraints? OKX uses zk-STARK technology to prove and verify all assets held in OKX accounts. OKX takes "snapshots" of all user accounts and applies "constraints" according to the "zk-STARK" algorithm. The first is the "total balance constraint," requiring the total asset amount to equal the sum of account asset balances; the second is the "non-negative constraint," ensuring no negative asset accounts are included to inflate the balance; the third is the "inclusivity constraint," ensuring no accounts are omitted, thus guaranteeing the authenticity and completeness of PoR data.
Notably, compared to other PoR technologies, the zk-STARK solution does not require any trusted setup to generate mathematically verifiable proofs, allowing anyone to independently verify its correctness; the entire process does not rely on secret information or external trust, is completely decentralized, and avoids platform manipulation and setup vulnerabilities, making it the safest solution for PoR currently available.
Pain Point 3: Technical Barriers to User Verification
Although PoR theoretically allows users to verify independently, in practice, ordinary users often lack the necessary technical knowledge to verify the exchange's proof of reserves independently, leading most users to passively trust the conclusions of exchanges or third-party auditing firms. This technical barrier severely limits the practical utility of PoR.
OKX's zk-STARK PoR solution supports user self-verification, truly realizing the core concept of "Don't Trust, Verify." For example, users can verify the inclusivity constraint through the following steps:
Log in to the OKX account and view the details of the PoR report.
Obtain JSON data containing account balances and Merkle paths.
Use open-source tools to independently verify whether their account assets are included in the Merkle nodes.
Users can also verify the total balance constraint and non-negative constraint, as well as OKX's ownership of wallet addresses and wallet assets, using the self-verification tutorials and tools provided by OKX. https://www.okx.com/zh-hans/proof-of-reserves. More specifically, OKX PoR also utilizes recursive proof technology to compress all data used for verification into a file smaller than 1MB. This means users do not need to download proof files that can be hundreds of MB or even several GB, greatly improving self-verification efficiency and transparency.
Pain Point 4: Lack of PoR Audit Standards
Currently, there are no unified PoR standards and methods in the industry. Users face a variety of verification processes and report formats from different exchanges, making it difficult to compare the security of various platforms horizontally and assess the professionalism and credibility of audit results. This lack of standardization increases users' cognitive burden and provides room for malicious exchanges to manipulate data, further undermining the transparency of the entire industry and user trust.
To address this pain point, OKX has launched a dual-layer guarantee of internal self-certification and external verification. On one hand, the innovative zk-STARK zero-knowledge proof technology eliminates potential vulnerabilities in traditional proof of reserves, achieving efficient verification without third-party trust and elevating reserve transparency to a new level; on the other hand, OKX collaborates deeply with independent third-party auditing firm Hacken to conduct regular monthly audits, publicly sharing the audit process and on-chain data, allowing users to check and verify independently at any time. Based on this, OKX has also fully open-sourced the PoR system, accompanied by detailed documentation and verification tools, providing the industry with a replicable standardized technical template that facilitates immediate verification and supervision by developers and the security community, while also promoting industry consensus and the standardization process of PoR.
Pain Point 5: Insufficient Asset Quality Assessment
Many exchanges, when releasing PoR reports, often only focus on "how much money and what currencies" without in-depth analysis of asset quality, mainly reflected in: a limited number of covered currencies, usually only listing mainstream or platform tokens while neglecting lesser-known coins and high-risk assets that account for a significant portion of holdings; an excessively high proportion of platform tokens, which can inflate overall valuation when introducing their own tokens, posing a risk of inflated values driven by interests; superficial market value displays, even if lesser-known tokens are disclosed, they are only presented in terms of nominal amounts or market value snapshots without comprehensive assessments considering market depth, liquidity, or price volatility. These shortcomings make it difficult for users to accurately judge the real solvency of exchanges. Once the market declines rapidly or liquidity drops sharply, the gap between nominal assets and actual realizable capabilities will expose security risks, creating a false sense of security for users and exposing them to uncontrollable potential risks. The gap between nominal assets and actual solvency will expose security risks, bringing users a false sense of security and potential uncontrollable risks.
OKX presents asset quality from multiple dimensions rather than focusing solely on quantity:
The "cleanliness" of non-platform tokens is about 70%, while maintaining a reserve ratio of over 100% for each mainstream token, proving that even without relying on platform tokens, user liabilities can be fully covered.
In the latest PoR, the total value of the four major mainstream tokens (BTC, ETH, USDT, USDC) accounts for about 66%. The total value of the top 10 mainstream tokens accounts for about 88.8%, and the total value of 22 publicly listed tokens accounts for about 90%, reflecting a healthier asset structure and risk diversification.
Recently, the reserve amounts of mainstream tokens have shown stable upward trends, with ETH increasing by 13.7% and BTC by 5.6%, indicating that user and institutional confidence in the platform's security and liquidity management continues to strengthen.
At the same time, OKX continues to expand the range of currencies covered by its PoR, growing from the initial 3 currencies to the current 22 currencies, essentially covering the main holdings of users, achieving a dual enhancement in asset coverage and depth in the PoR report, providing users with a more comprehensive and transparent reference for solvency.
Leading a New Standard of Transparency in PoR
The fully upgraded PoR from OKX not only represents a technological leap but also reflects the company's social responsibility. For users, transparency is no longer optional but an unshakable commitment from exchanges; asset verification is no longer a privilege but a basic right for every user. This upgrade has transformed users from passive trust to active verification. For the industry, this move brings the crypto world back to the original intention of decentralization, marking the beginning of a mature phase in crypto finance and setting a new benchmark for transparency and security across the entire industry.
For OKX itself, the design of the PoR system makes any "malicious act" mathematically impossible, eliminating the need for the exchange to build trust through reputation; when transparency is deeply embedded at the protocol level, regulatory bodies can also rest easy; when preventive mechanisms become the norm in the industry, the risk of black swan events is significantly reduced. Looking back at the development of crypto assets, every trust crisis has spawned new solutions, and this time, OKX's PoR is not only a technological breakthrough but also a liberation of concepts—proving to the world that in the Web3 world, trust can be encoded, transparency can be verified, and security can be witnessed.
Disclaimer
This article is for reference only. It represents the author's views and does not reflect the position of OKX. This article does not intend to provide (i) investment advice or recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; (iii) financial, accounting, legal, or tax advice. We do not guarantee the accuracy, completeness, or usefulness of such information. Holding digital assets (including stablecoins and NFTs) involves high risks and may fluctuate significantly. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. Please consult your legal/tax/investment professionals regarding your specific circumstances. You are responsible for understanding and complying with applicable local laws and regulations.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
