Bybit Releases Merkle Tree-Verified Proof of Reserves
Dubai-based crypto exchange Bybit releases its Proof of Reserve.
Binance was the first to make its reserves available to the public.
The new features allow for the verification of Bybit's wallet ownership.
Bybit Launches Merkle Tree-Based Proof-of-Reserve System
Bybit, a cryptocurrency exchange, has joined the ranks of exchanges
Calling for greater transparency in the aftermath of the FTX debacle.
On December 12, it announced the release of a Merkle Tree-based proof-of-reserve system. The new transparency initiative enables users to easily verify Bybit's holdings as well as their personal funds deposited in the exchange.
The option is available to all customers who have funds in trading and financing accounts, as well as crypto holdings in Bybit Earn products.
Furthermore, the new feature allows for the verification of Bybit's wallet ownership, as assets are stored in a 1:1 ratio.
Bybit co-founder and CEO Ben Zhou commented on the use of Merkle Trees in liquidity verification:
“The cryptographic solution provides a crypto-native, trustless approach for giving verifiable evidence of our on-chain assets and liabilities.”
The exchange is also improving withdrawals and tightening risk management rules, according to the release. It also pledged to make available all of the information in its Bitcoin and Ether wallets.
It has already revealed its reserve wallet addresses on November 16, the week after the FTX controversy broke.
Many of the industry's top firms have adopted similar transparency methods as users shift their focus to keeping their funds safe and exchanges accountable.
Binance was the first to make its reserves available to the public and pledge for a Merkle Tree-based system, which it then published two weeks later.
However, after releasing some of its otherwise internal data, red flags in the exchange's finances such as its corporate structure, BTC liabilities, and internal control quality were revealed.
Huobi and Gate.io, two other exchanges, were also scrutinized after publishing snapshots of their reserves using loaned funds. Grayscale, on the other hand, claims it is unwilling to release anything owing to security concerns.
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