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 A Closer Look at Proof of Reserve: Valuable Assurance or Just a Title?


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Recently, both Bitget and Binance implemented Proof of Reserve, a move aimed at providing users with additional assurance about the solvency of the platforms. It got me thinking: Is Proof of Reserve a genuine gain for us users, or is it just a catchy term?

Here are a few thoughts on the matter:

The Gains:

Transparency Boost: Proof of Reserve aims to enhance transparency by allowing users to verify that the amount of cryptocurrency held by the exchange matches its liabilities. This transparency is a step in the right direction for user trust.

Risk Mitigation: Knowing that an exchange has implemented Proof of Reserve can potentially mitigate the risk of insolvency or fractional reserve practices. It's a reassuring measure for users who prioritize the security of their assets.

The Skepticism:

Implementation Variability: Not all Proof of Reserve implementations are created equal. The effectiveness of the system depends on the methodology and frequency of verifications. The **** might be in the details.

Third-Party Dependence: Some implementations involve third-party audits. While this adds an extra layer of credibility, it also introduces a level of dependence on the trustworthiness of the auditing entity.

The Verdict:

Proof of Reserve, in essence, seems like a positive move. It aligns with the ethos of transparency and accountability that we, as users, value in the crypto space. However, the **** is in the details of the implementation. It's crucial to dive into the specifics of how these exchanges are executing Proof of Reserve to truly gauge its effectiveness.

What are your thoughts on this? Do you see Proof of Reserve as a genuine gain, or do you think it's just a name without much substance? Let's chat and share our insights on this evolving aspect of crypto exchanges.

 

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7 hours ago, XTRAVAGANZA said:

Recently, both Bitget and Binance implemented Proof of Reserve, a move aimed at providing users with additional assurance about the solvency of the platforms. It got me thinking: Is Proof of Reserve a genuine gain for us users, or is it just a catchy term?

Here are a few thoughts on the matter:

The Gains:

Transparency Boost: Proof of Reserve aims to enhance transparency by allowing users to verify that the amount of cryptocurrency held by the exchange matches its liabilities. This transparency is a step in the right direction for user trust.

Risk Mitigation: Knowing that an exchange has implemented Proof of Reserve can potentially mitigate the risk of insolvency or fractional reserve practices. It's a reassuring measure for users who prioritize the security of their assets.

The Skepticism:

Implementation Variability: Not all Proof of Reserve implementations are created equal. The effectiveness of the system depends on the methodology and frequency of verifications. The **** might be in the details.

Third-Party Dependence: Some implementations involve third-party audits. While this adds an extra layer of credibility, it also introduces a level of dependence on the trustworthiness of the auditing entity.

The Verdict:

Proof of Reserve, in essence, seems like a positive move. It aligns with the ethos of transparency and accountability that we, as users, value in the crypto space. However, the **** is in the details of the implementation. It's crucial to dive into the specifics of how these exchanges are executing Proof of Reserve to truly gauge its effectiveness.

What are your thoughts on this? Do you see Proof of Reserve as a genuine gain, or do you think it's just a name without much substance? Let's chat and share our insights on this evolving aspect of crypto exchanges.

 

There was a time a lot of analysts thought it was just a play to the gallery but I think now it has become a viable standard to measure the reliability of an exchange. Most exchange have regularly updated this document accompanied with release of wallet addresses to verify these claims and recent reports shows Bitget has really made gains in these last 2 quarters of 2023. This has been my expectation judging from H1 report from Nansen and cointelegraph on exchanges.

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In as much as POR is a welcome development, It will be a great idea if exchanges can also release proof of Liabilities. This will totally eradicate any fear from users coz they will be able to match the POR to POL and know their stand. Remember FTX was actually doing well in the media but behind the scene, the story is different. It is encouraging that exchanges have taken the right initiative to introduce POR but from my findings, many exchanges claim to have it but we haven't seen them display the wallet address publicly except for Bitget and Binance.

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On 17/11/2023 at 16:50, XTRAVAGANZA said:

Recently, both Bitget and Binance implemented Proof of Reserve, a move aimed at providing users with additional assurance about the solvency of the platforms. It got me thinking: Is Proof of Reserve a genuine gain for us users, or is it just a catchy term?

Here are a few thoughts on the matter:

The Gains:

Transparency Boost: Proof of Reserve aims to enhance transparency by allowing users to verify that the amount of cryptocurrency held by the exchange matches its liabilities. This transparency is a step in the right direction for user trust.

Risk Mitigation: Knowing that an exchange has implemented Proof of Reserve can potentially mitigate the risk of insolvency or fractional reserve practices. It's a reassuring measure for users who prioritize the security of their assets.

The Skepticism:

Implementation Variability: Not all Proof of Reserve implementations are created equal. The effectiveness of the system depends on the methodology and frequency of verifications. The **** might be in the details.

Third-Party Dependence: Some implementations involve third-party audits. While this adds an extra layer of credibility, it also introduces a level of dependence on the trustworthiness of the auditing entity.

The Verdict:

Proof of Reserve, in essence, seems like a positive move. It aligns with the ethos of transparency and accountability that we, as users, value in the crypto space. However, the **** is in the details of the implementation. It's crucial to dive into the specifics of how these exchanges are executing Proof of Reserve to truly gauge its effectiveness.

What are your thoughts on this? Do you see Proof of Reserve as a genuine gain, or do you think it's just a name without much substance? Let's chat and share our insights on this evolving aspect of crypto exchanges.

 

To be honest, if you go through CMC, there are plenty of exchanges who have released their PoR. Hard to differentiate for retailers. Instead of PoR , I like these kinda things~

 

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On 18/11/2023 at 16:59, Wakanda said:

In as much as POR is a welcome development, It will be a great idea if exchanges can also release proof of Liabilities. This will totally eradicate any fear from users coz they will be able to match the POR to POL and know their stand. Remember FTX was actually doing well in the media but behind the scene, the story is different. It is encouraging that exchanges have taken the right initiative to introduce POR but from my findings, many exchanges claim to have it but we haven't seen them display the wallet address publicly except for Bitget and Binance.

Proof of liabilities has been the debate since the day of the first PoR released last year. However, if exchanges can continue to publish the wallet that houses their PoR, that will go a long way in addressing the concerns about transparency.

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