The cryptocurrency industry, born out of a lack of trust in traditional financial systems, has gradually emerged and sparked people's thinking and widespread attention worldwide, growing into a trillion-dollar market. However, as a nascent industry without any reference, the cryptocurrency market brings innovation and vitality to the traditional financial market, but the various emerging black swan events cannot be ignored. Compliance and transparency are becoming the main theme of its future development.

As a leading global cryptocurrency trading platform and Web3 technology company, OKX has unparalleled security and liquidity, prioritizing user asset safety as its first principle. It is committed to improving platform transparency to meet traditional financial audit requirements and is becoming a benchmark for industry transparency. Among them, OKX's constantly iterating Proof of Reserve (POR) technology and approach have been rated by blockchain expert Nic Carter as the highest level representing mainstream trading platform POR quality.

Reserve proof is the key to building trust between platforms and regulatory agencies, and is crucial to promoting a healthy and sustainable encrypted ecosystem. OKX is committed to maintaining a 1:1 reserve ratio, demonstrating its commitment to promoting the healthy growth of the platform and ensuring the accuracy of customer funds and net balance data.

On October 30th, OKX released the 12th reserve proof report, with reserve ratios exceeding 100% for 22 listed currencies. The reserve ratios for BTC, ETH, and USDT were all 103%, with a total value of 12.564 billion US dollars.

OKX's twelfth release of POR marks a full year since its initial release in late 2022. Over the past year, OKX has consistently released POR on a monthly basis, gradually increasing the number of publicly listed currencies from 3 to 22. The reserve ratio has remained above 100% for 12 consecutive months, and the POR system has achieved several milestones through the continuous upgrading of technologies such as Merkel Trees, Full View Merkel Trees, and zk-STARK.

OKX POR One-Year Milestone Event Review

Reserve Proof of Reserves (POR) is designed to verify whether a user's assets are backed 1:1 on a cryptocurrency exchange, demonstrating their solvency and adequate liquidity to the user.

OKX is currently the only trading platform in the industry that simultaneously implements open source verification of Merkle tree, open source verification of wallet address ownership, and open source verification of on-chain assets. While protecting privacy, it allows users to independently verify their solvency at any time. Currently, hundreds of thousands of users have participated in accessing the POR page and completed self-verification.

 Reserve proof is a cryptographic proof method used to confirm that a digital currency trading platform holds a specific amount of assets on a certain blockchain at a specific time, thereby increasing the transparency of the total assets of users and the total deposits of the trading platform, while not disclosing any sensitive information about individual account balances. Reserve proof has become a key component of the cryptographic ecosystem.

 The asset used for reserves is a highly liquid and widely accepted digital currency. OKX provides reserve proof for up to 22 currencies, including BTC, ETH, USDT, USDC, XRP, DOGE, SOL, OKB, APT, DASH, DOT, ELF, EOS, ETC, FC, LINK, LTC, OKT, PEOPLE, TON, TRX, and UNI.

On the occasion of its one-year anniversary, OKX POR has announced several key milestones:

• In November 2022, OKX became one of the first mainstream trading platforms to issue a reserve proof, with its first reserve proof.

• In February 2023, the number of users who viewed the reserve proof on OKX exceeded 250,000.

• In March 2023, OKX upgraded its reserve proof transparency through Merkel Tree and publicly disclosed all debt Merkel Trees, while ensuring user privacy.

• In April 2023, OKX will introduce zk-STARK technology into reserve proof, allowing users to independently verify the exchange's ability to pay and confirm that their assets are fully protected.

• In April 2023, OKX will expand the coverage of reserve proof assets to more than 21 mainstream currencies and release over 220,000 public wallet addresses.

• In September 2023, the industry's leading reserve proof, expert Nic Carter referred to OKX's reserve proof as the "highest quality" among mainstream trading platforms.

• In October 2023, the OKX Reserve Proof celebrates its first anniversary. The twelfth OKX Reserve Proof report has been released, marking a year of continued leadership.

 OKX Chief Marketing Officer Haider Rafique said: "Releasing hundreds of thousands of blockchain addresses, introducing zero-knowledge technology for trustless verification, and listening to user feedback and upgrading iterations represent the tremendous efforts OKX has made over the past 12 months. I would like to take this opportunity to encourage you, whether you are an OKX user or not, to re-examine our reserve proof. OKX is setting standards for trust and transparency in the cryptocurrency industry."

OKX verifies user assets through zk-STARK and enhances POR transparency

Continuous innovation has been the core driving force for OKX throughout its journey, and this is also reflected in OKX POR.

During this year, OKX has continuously upgraded the POR system through technologies such as Merkle Tree, Full View Merkle Tree, and zk-STARK, completing self-certification of solvency while promoting fund transparency for CEX, bringing confidence to users.

Looking back at the OKX POR upgrade process, OKX initially proved the platform's assets by introducing Merkle Tree technology. Merkle Tree is a data structure that efficiently and securely verifies data integrity by chunking raw data, calculating hashes, and constructing a tree structure. It is widely used in cryptography, data security, and many other fields. Through Merkle Tree technology, the platform's assets are generally verified by verifying whether the user's assets are included in the Merkle Tree, verifying the ownership of the trading platform wallet, and verifying whether the assets of the trading platform's published wallet address are greater than or equal to the user's total assets. This proves that the trading platform's asset reserve is sufficient. According to public data, OKX's reserve ratio has exceeded 100% for 12 consecutive months.

Although this technology can verify whether a user's assets are recorded on a trading platform while ensuring the security and privacy of user data, it cannot completely prove that the funds have not been misappropriated. To make up for the shortcomings of the Merkel Tree technology, OKX subsequently upgraded to the Full View Merkel Tree technology, further improving the transparency of its reserve funds. Through this technology, users can download the Full View Merkel Tree to verify whether the total assets of all users published by the trading platform are correct. In addition, by randomly splitting user data, the privacy of users is ensured while all user balances are disclosed. That is, the complete asset data of individual users will not be visible to others.

Subsequently, in order to continuously promote industry transparency, in less than half a year, OKX once again took the lead in upgrading its Proof of Reserve (POR) by introducing the advanced and innovative zero-knowledge proof zk-STARK technology, which raised the transparency of the trading platform's assets to the latest industry level. zk-STARK, which stands for Zero-Knowledge Scalable Transparent Argument of Knowledge, is a secure method of verifying data and proving the authenticity of audits through the principles of zero-knowledge and the FRI protocol. In addition, zk-STARK does not disclose specific amounts, values, or addresses, thereby protecting user privacy. The zk-STARK proof model mainly includes three constraints on the user side statistics: total value of user assets, non-negative net assets, and asset inclusion, which allows users to independently verify the trading platform's ability to pay, making up for the shortcomings of Merkle tree technology.

The core function of POR is to prove that the total reserve of the trading platform is greater than the total liabilities (all user assets). First, OKX uses the "zk-STARK" zero-knowledge proof algorithm to prove and verify all user assets held by the trading platform. Then, it will verify the ownership of the OKX on-chain wallet addresses and the total amount of OKX wallet assets. Finally, by comparing the total assets of the trading platform users with the total assets in the publicly disclosed OKX on-chain wallet addresses, the asset reserve ratio of the OKX platform is verified.

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