Proof of Reserves: Cryptocurrency Asset Verification

·

In the fast-evolving world of digital finance, trust and transparency are non-negotiable. As a leading cryptocurrency exchange, OKX continues to set industry benchmarks with its 32nd Proof of Reserves (PoR) report, confirming $28.4 billion in primary assets held across user accounts, on-chain wallets, and third-party custodians. This milestone reinforces our unwavering commitment to security, solvency, and user confidence.

Why Proof of Reserves Matters in Crypto

For users navigating the decentralized landscape, knowing that their assets are fully backed is essential. Proof of Reserves ensures that a crypto platform holds sufficient reserves—on a 1:1 basis—to cover all customer deposits. This mechanism protects against insolvency and builds long-term trust between exchanges, users, and regulators.

At OKX, we go beyond compliance. Our monthly PoR audits verify that every dollar-equivalent deposited by users is matched by real, verifiable digital assets stored securely on-chain. These reports are not just internal checks—they’re public, cryptographic proofs anyone can validate independently.

👉 Discover how transparent asset verification strengthens your crypto security today.

Understanding Proof of Reserves

Proof of Reserves (PoR) is a cryptographic audit method that proves a cryptocurrency exchange holds enough assets to cover all user liabilities. It confirms that customer funds are not only accounted for but also fully backed at all times.

Unlike traditional financial statements, PoR leverages blockchain transparency to provide real-time, tamper-proof validation without exposing sensitive user data. This means:

OKX currently publishes reserve reports for 22 major cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and leading stablecoins like USDT and USDC—ensuring comprehensive coverage of user holdings.

How OKX’s Proof of Reserves Works

Our PoR system combines cutting-edge cryptography with open-source transparency. Here's how it works in three key steps:

  1. zk-STARK Verification of User Balances
    We use Zero-Knowledge Scalable Transparent Arguments of Knowledge (zk-STARKs) to cryptographically prove the total sum of all user account balances without revealing individual data.
  2. On-Chain Wallet Ownership Confirmation
    OKX discloses its public wallet addresses with signed messages ("I am an OKX address") to prove ownership. These addresses are publicly auditable on the blockchain.
  3. Reserve Ratio Calculation
    By comparing total user liabilities (account assets) against on-chain holdings, we confirm a reserve ratio of 100% or higher, ensuring full backing of user funds.

This end-to-end process guarantees accuracy, privacy, and trust—all critical components in maintaining a secure crypto ecosystem.

The Role of zk-STARK in Asset Verification

zk-STARK technology is at the heart of OKX’s Proof of Reserves framework. It enables us to generate cryptographic proofs that validate massive datasets efficiently and securely.

What Is zk-STARK?

zk-STARK stands for Zero-Knowledge Scalable Transparent Argument of Knowledge. It allows one party to prove the truth of a statement without revealing the underlying data. In our case, OKX can prove:

All of this happens while preserving complete privacy and eliminating the need for trusted third parties.

How OKX Uses zk-STARK to Protect Your Assets

We apply three core constraints to ensure data integrity:

🔹 Rule 1: Total Balance Constraint

The reported total of all user assets must equal the sum of individual account balances. This prevents overstatement or manipulation of reserve figures.

🔹 Rule 2: Non-Negative Constraint

Every user account must have a positive or zero balance. Negative balances would indicate insolvency risk—something our system automatically flags and prevents.

🔹 Rule 3: Inclusion Constraint

Each user’s balance must be included in the Merkle tree structure used for verification. This ensures no accounts are omitted from the audit.

These rules are enforced through automated cryptographic checks, making fraud or error virtually impossible.

👉 See how zero-knowledge proofs are revolutionizing financial transparency in crypto.

How to Verify OKX’s Proof of Reserves Yourself

Transparency isn’t just about publishing reports—it’s about enabling users to verify them independently. With OKX’s open-source tools, anyone can perform self-verification in minutes.

Step 1: Verify Inclusion Constraint (September 2024 Onwards)

Ensure your account balance was included in the PoR snapshot:

  1. Go to your Account Statement section and click Details.
  2. Click Copy Data and save the string as _inclusion_proof.json in a new folder.
  3. Download the OKX zk-STARK Validator tool and place it in the same folder.
  4. Run the validator—it will automatically process your file.

✅ Success Message: "Inclusion constraint validation passed"
❌ Failure Message: "Inclusion constraint validation failed"

You can access historical Merkle trees:

Step 2: Validate Total Balance & Non-Negative Constraints

Confirm the accuracy of OKX’s total liability claims:

  1. From the Liability Report tab, download the zk-STARK file.
  2. Extract the sum_proof_data.json file.
  3. Place the zk-STARK Validator in the same directory.
  4. Launch the tool to run automatic verification.

✅ Success Message: "Total sum and non-negative constraint validation passed"
❌ Failure Message: "Total sum and non-negative constraint validation failed"

Step 3: Confirm Wallet Address Ownership & Balance

Verify that OKX controls its published on-chain wallets:

  1. Download the official list of OKX wallet addresses.
  2. Use the open-source verification tool to check digital signatures.
  3. Copy the BTC address, message ("I am an OKX address"), and signature.
  4. Paste into a third-party or OKX signature verifier.
  5. Match the wallet balance against blockchain data at the specified block height.

If the signature validates and the balance matches, ownership is confirmed.

Frequently Asked Questions (FAQ)

What is Proof of Reserves?

Proof of Reserves (PoR) is a cryptographic audit proving that a crypto exchange holds sufficient assets to cover all customer deposits—ensuring full backing and platform solvency.

Why is a 1:1 reserve ratio important?

A 1:1 ratio means every user deposit is matched by real reserves. This prevents fractional reserve practices and protects users during market volatility.

Can I verify my own balance in the PoR?

Yes. Using OKX’s open-source tools, you can confirm your balance was included in the Merkle tree and validated via zk-STARK proofs.

Does Proof of Reserves prevent exchange collapse?

While not a guarantee, PoR significantly reduces insolvency risk by providing real-time transparency into asset backing and financial health.

How often does OKX publish PoR reports?

OKX releases Proof of Reserves reports monthly, with historical data available since November 2022.

Are stablecoins included in reserve calculations?

Yes. Stablecoins like USDT, USDC, and DAI are fully accounted for in our reserve audits and contribute to overall liquidity coverage.

👉 Start verifying your asset security with cutting-edge cryptographic tools now.

By combining blockchain transparency, zero-knowledge proofs, and open-source verification, OKX sets a new global standard for trust in digital finance. Whether you're a trader, investor, or observer, you can have full confidence that your assets are protected—not just by promises, but by provable, auditable truth.