Holding 100% of Users' Assets with Proof of Reserves | Bitget Best Crypto Exchange Platform

Latest reserve ratio

The reserve ratio is the platform's assets divided by the users' assets. A reserve ratio greater than or equal to 100% means that the platform is capable of covering all user assets.

What is Proof of Reserves?

The term "Proof of Reserves" refers to an auditing procedure that verifies the holdings of an exchange through cryptographic proofs, public wallet ownership, and recurring audits. The custodian provides transparency and proof of the existence of liquid on-chain reserves that exceed or equal the sum of all user holdings.

To achieve this, Bitget stores the hash of each user account's assets in a leaf node on the Merkle tree. Each user can verify that their assets exist in the Merkle tree by checking the total amount of user assets stored in the Merkle tree leaf nodes.

If the total amount verified is greater than or equal to 100%, this means that the platform has proven that it can cover all user assets.

The open-source code of Bitget's Proof of Reserves can be found on GitHub.

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Our commitment to maximum transparency

1. Each month, we take snapshots of all the assets held in our wallets and make them available publicly.

2. We take snapshots of each user's assets each month and publish them after removing sensitive data.

3. Users can verify their assets anytime with just a few simple steps.

Why is a 100% reserve ratio important?

Cannot prove 100% reserves

Can be a telltale sign of asset misappropriation.

Low risk tolerance for black swan events.

Concentrated withdrawals can lead to a bank run, which may result in a loss of user assets.

Proof of 100% reserves

Means that the platform has sufficient reserves.

Effectively guarantees that users' assets are safe.

The platform is capable of covering user withdrawals, even if 100% of user assets are withdrawn.

Proof of 100% reserves

Means that the platform has sufficient reserves.

Effectively guarantees that users' assets are safe.

The platform is capable of covering user withdrawals, even if 100% of user assets are withdrawn.

Cannot prove 100% reserves

Can be a telltale sign of asset misappropriation.

Low risk tolerance for black swan events.

Concentrated withdrawals can lead to a bank run, which may result in a loss of user assets.

Merkle Tree basics

A Merkle Tree is primarily used to verify data integrity more efficiently. Each account is represented by an Acct node at the bottom, and the balances and account names of each account will be computed once with SHA256 encryption. The obtained hash value can be computed again with the adjacent one, and then layer by layer upwards until the hash calculation reaches the root of the Merkle tree. To verify whether the current reserves have been changed, the user only needs to follow the steps to make a hash calculation of their own account, find the position in the tree and the adjacent nodes, and then calculate the hash upward layer by layer until finally reaching the root of the tree calculated by the user. If it is consistent with the official announcement, then everything is accounted for.

As shown in the figure below: