Jump to content

Does Proof of Reserves build your trust in exchanges?


Recommended Posts

In 2022, the crypto industry was hit with a shocker– FTX was filing for bankruptcy. The leading exchange might have been guilty of mismanaging customer funds and was exiting the market, casting doubts as to whether they (and other exchanges) indeed hold the assets customers place in their care.

This distasteful collapse resulted in heightened distrust amongst traders, it then became apparent that Proof of Reserves (PoR) would go a long in reinstating customers’ trust. In a nutshell, a PoR refers to an independent audit of a crypto exchange, usually by smart contract audit companies to show that an exchange actually holds users’ assets as claimed.

Going forward PoR has somewhat become a symbol of security and transparency amongst exchanges, a commitment towards fostering unwavering confidence in their platform. Bitget for instance has gone a step further to meet an outstanding reserve ratio of 199% as seen on Coinmarketcap as at Nov 3rd 2023. This infact means that for every dollar a user deposits on the platform, an additional dollar is allocated to ensure absolute solvency and security of their assets.

Insecurity remains one of the industry’s dire limitations, however the leading exchanges are employing various measures to effectively tackle the loopholes and secure customers’ trust, PoR as one.

Having witnessed the unfortunate FTX shutdown, would you likely opt for exchanges with auditable PoR over the non PoR exchanges? 

 

 

 

Link to comment

Of course PoR has become an important factor to consider before making a choice of CEX recently. This has become the trend since the the ftx saga and i think most top CEX are now becoming transparent. Tho, more need to be done and i must appreciate the aforementioned exchange cos they did not also launch customer protection fund but the wallet to the fund has been accessible to the user and amazingly growing steadily.

Edited by Maxicreed01
Link to comment
On 05/11/2023 at 17:23, Incarts said:

In 2022, the crypto industry was hit with a shocker– FTX was filing for bankruptcy. The leading exchange might have been guilty of mismanaging customer funds and was exiting the market, casting doubts as to whether they (and other exchanges) indeed hold the assets customers place in their care.

This distasteful collapse resulted in heightened distrust amongst traders, it then became apparent that Proof of Reserves (PoR) would go a long in reinstating customers’ trust. In a nutshell, a PoR refers to an independent audit of a crypto exchange, usually by smart contract audit companies to show that an exchange actually holds users’ assets as claimed.

Going forward PoR has somewhat become a symbol of security and transparency amongst exchanges, a commitment towards fostering unwavering confidence in their platform. Bitget for instance has gone a step further to meet an outstanding reserve ratio of 199% as seen on Coinmarketcap as at Nov 3rd 2023. This infact means that for every dollar a user deposits on the platform, an additional dollar is allocated to ensure absolute solvency and security of their assets.

Insecurity remains one of the industry’s dire limitations, however the leading exchanges are employing various measures to effectively tackle the loopholes and secure customers’ trust, PoR as one.

Having witnessed the unfortunate FTX shutdown, would you likely opt for exchanges with auditable PoR over the non PoR exchanges? 

 

 

 

This is quite insightful, and has driven some curiosity in me and I had to check which exchanges has published their proof of reserve, turns out not many have done this in reality and the leading exchanges seems to take it very seriously, I guess this is to prove the effectiveness of their financial control even coinmarketcap recently announced updated proof of reserve for Bitget which totals $1.54 billion. I definitely will upt in for exchanges that audit their proof of reserve.

Link to comment

Since the collapse of FTX, traders have become more cautious in their trading activities. As a result, exchanges have started showcasing their proof of reserve (PoR) to demonstrate their trustworthiness to traders. Personally, I feel more confident trading on centralized exchanges (CEXs) that have been audited for PoR, as it provides an added layer of security.

Link to comment
3 hours ago, XTRAVAGANZA said:

Like the popular saying goes ''fool me once, shame on you, fool me twice shame on me''. Going by this, sticking with exchanges that have auditable PoR is a no brainer for me. Cos i feel more confident that i wont wake up one morning and become a victim of another FTX saga. 

With the current trend in the crypto space, Transparent POR should be a prerequisite for choosing an exchange. Also users protection fund should be considered. 

Link to comment
On 07/11/2023 at 12:51, XTRAVAGANZA said:

Like the popular saying goes ''fool me once, shame on you, fool me twice shame on me''. Going by this, sticking with exchanges that have auditable PoR is a no brainer for me. Cos i feel more confident that i wont wake up one morning and become a victim of another FTX saga. 

Hmm! The memory of FTX saga looks fresh in my memory & wouldn't want to experience that again. The introduction of PoR has made users to choose a reputable as well as most solvent Exchanges to avoid incidence like the aforementioned saga that made me run at a loss, It has helped me a lot TBH.

Link to comment
15 hours ago, gandalf03 said:

Hmm! The memory of FTX saga looks fresh in my memory & wouldn't want to experience that again. The introduction of PoR has made users to choose a reputable as well as most solvent Exchanges to avoid incidence like the aforementioned saga that made me run at a loss, It has helped me a lot TBH.

FTX saga helps in the development of the crypto industry because lots of precautions has been made to avoid such scenario again. Also users have now learn the importance of choosing the right exchange and considering lots of factors other than CG or CMC ranking, trading volume and user base in making such choice. We must consider transparency of POR and users protection funds before choosing an exchange now. 

Link to comment
  • 5 months later...

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • XOM Elliott Wave Analysis Trading Lounge Daily Chart, Exxon Mobil Inc., (XOM) Daily Chart XOM Elliott Wave Technical Analysis FUNCTION: Counter Trend MODE: Corrective STRUCTURE: ZigZag POSITION: Wave {iv} of 1. DIRECTION: Bottom in wave {iv}. DETAILS: Correcting deeper than expected in wave {iv}, but we could still turn higher as we approach 110$.     XOM Elliott Wave Analysis Trading Lounge 4H Chart, Exxon Mobil Inc., (XOM) 4H Chart XOM Elliott Wave Technical Analysis FUNCTION: Counter Trend MODE: Corrective STRUCTURE: ZigZag   POSITION: Wave (c) of {ii}. DIRECTION: Bottom in wave (c). DETAILS: We are at 0.618 (c) vs. (a). Looking for a turn soon, next target would be equality of (c) vs. (a) at 110$. Welcome to our latest Elliott Wave analysis for Exxon Mobil Inc. (XOM) as of May 24, 2024. This analysis provides an in-depth look at XOM's price movements using the Elliott Wave Theory, helping traders identify potential opportunities based on current trends and market structure. We will cover insights from both the daily and 4-hour charts to offer a comprehensive perspective on XOM's market behavior.   * XOM Elliott Wave Technical Analysis – Daily Chart* In our Elliott Wave analysis of Exxon Mobil Inc. (XOM). we observe a counter-trend corrective pattern characterized by a ZigZag structure. XOM is currently positioned in wave {iv} of 1, indicating a bottom in wave {iv}. Despite a deeper than expected correction in wave {iv}, there is potential for a reversal as XOM approaches the $110 level. Traders should monitor this key support area for signs of a turn higher, which could signal the resumption of the primary trend.   * XOM Elliott Wave Technical Analysis – 4H Chart* On the 4-hour chart, XOM is following a counter-trend corrective mode within a ZigZag structure, specifically in wave (c) of {ii}. The current analysis shows that XOM is at the 0.618 Fibonacci retracement level of (c) vs. (a), suggesting a potential bottom in wave (c). If this level holds, the next target would be the equality of (c) vs. (a) at $110. Traders should watch for a bullish turn at this level, which could provide a strategic entry point for long positions.   Technical Analyst : Alessio Barretta Source : Tradinglounge.com get trial here!  
    • Asian stocks tracked Wall Street lower as strong US flash PMI data increased expectations that interest rates will remain higher for longer, leading investors to shy away from risky assets. Much weaker-than-expected UK retail sales are further contributing to investor risk aversion and weighing on stocks. Japan reported slowing headline and core inflation, while oil prices dropped sharply this week following better-than-expected US flash PMI data with the US dollar set for a weekly gain.  
    • AUDUSD Elliott Wave Analysis Trading Lounge Day Chart, Australian Dollar/U.S.Dollar (AUDUSD) Day Chart AUDUSD Elliott Wave Technical Analysis FUNCTION: Trend MODE: corrective STRUCTURE: blue wave 2 POSITION:  black wave 3 DIRECTION NEXT HIGHER  DEGREES:blue wave 2 DETAILS: :blue wave 1 looking completed at  0.67165. Now blue wave 2 of 3 is in play. Wave Cancel invalid level: 0.63628   The AUDUSD Elliott Wave analysis on the day chart examines the market using Elliott Wave theory to understand the ongoing trend and forecast future movements. The current market function is identified as a trend, indicating that the price movements are generally following a predictable pattern that can be analyzed and projected.   The mode of the market movement is corrective, suggesting that the market is in a phase of adjustment or retracement within the larger trend. Specifically, the structure being analyzed is blue wave 2, which is part of a larger corrective pattern within the broader trend.   The market is currently positioned in black wave 3, meaning it is in the third wave of a larger five-wave sequence. This position within the wave sequence indicates that the market is in a significant phase of movement that often involves substantial price shifts.   Looking to the next higher degrees, the analysis suggests a transition to blue wave 3 after the completion of the current corrective phase (blue wave 2). This indicates that following the correction, the market is expected to resume its primary trend with an impulsive wave, which is typically characterized by strong and decisive price movements.   The details of the analysis highlight that blue wave 1 has been completed at a specified level, marking the end of the initial phase of the trend. Now, blue wave 2 of 3 is in play, indicating that the market is undergoing a correction before it resumes the primary trend direction with blue wave 3. A critical aspect of this analysis is the wave cancel invalid level, set at a specific point. This level serves as a threshold; if the market price drops below this point, it would invalidate the current wave count and necessitate a reassessment of the wave structure and market projections. Monitoring this level is essential to confirm the validity of the wave pattern and ensure accurate predictions.   In summary, the AUDUSD on the day chart is currently in a corrective phase within blue wave 2 of a larger trend. The market is expected to complete this correction before transitioning to blue wave 3, marking a return to the primary trend. The wave cancel invalid level is a crucial point to watch to validate the current analysis and future forecasts.     AUDUSD Elliott Wave Analysis Trading Lounge 4 Hour Chart,       Australian Dollar/U.S.Dollar (AUDUSD) 4 Hour Chart     AUDUSD Elliott Wave Technical Analysis   FUNCTION: Counter Trend MODE: corrective STRUCTURE: red wave C POSITION: blue wave 2 DIRECTION NEXT HIGHER  DEGREES:blue wave 3 DETAILS: red wave B of 2 looking completed, now red wave C of 2 is in paly. Wave Cancel invalid level: 0.63628       The AUDUSD Elliott Wave analysis on the 4-hour chart focuses on the current market trends using Elliott Wave theory. This analysis identifies the prevailing function as a counter-trend, suggesting that the market is moving against the primary trend, undergoing a temporary correction or retracement phase.   The mode of this market movement is corrective, which is characterized by a structure designed to counter the preceding trend. Specifically, the structure under examination is red wave C, which is part of a larger corrective wave pattern. In this context, the market is currently positioned in blue wave 2, indicating that the market is in the process of completing a correction before potentially resuming the primary trend.   The analysis suggests that the direction in the next higher degrees will be blue wave 3. This implies that after the completion of the current corrective phase (blue wave 2), the market is expected to enter a new impulsive phase, characterized by stronger and more decisive price movements in the direction of the primary trend.   The details provided indicate that red wave B of blue wave 2 appears to be completed, and now red wave C of blue wave 2 is in play. This phase involves the market completing its corrective movements before potentially resuming its primary trend direction. The completion of red wave C will mark the end of the corrective phase (blue wave 2), setting the stage for the next impulsive wave (blue wave 3).   A crucial aspect of this analysis is the wave cancel invalid level, set at 0.63628. This level serves as a critical threshold; if the market price drops below this point, it would invalidate the current wave count, necessitating a reassessment of the wave structure and the market’s projected direction. Monitoring this level is essential to confirm the validity of the wave pattern and ensure accurate market predictions.   In summary, the AUDUSD is currently in a counter-trend on the 4-hour chart, undergoing a corrective phase within blue wave 2. The market is expected to complete red wave C before transitioning to blue wave 3, marking a return to the primary trend. Keeping an eye on the invalidation level is crucial to validate the current wave count and ensure the accuracy of future market forecasts.   Technical Analyst : Malik Awais Source : Tradinglounge.com get trial here!  
×
×
  • Create New...
us