Bybit bets on transparency with cryptographic proof-of-reserves

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Blockchain
Bybit bets on transparency with cryptographic proof-of-reserves

Cryptocurrency exchange Bybit released a Merkle tree proof-of-reserves (PoR), in a joint bid by centralized crypto service providers to regain the community’s trust lost after the fall of FTX.

In a Dec. 12 announcement shared with crypto.news, Bybit released its Merkle tree-based PoR as part of a new transparency initiative. Such systems allow exchange users to shine a light on the company’s finances. Ben Zhou, co-founder and CEO of Bybit, said:

“Our proof-of-reserves system uses a purpose-built Merkle Tree. The cryptographic solution brings forth a crypto-native, trustless model of providing verifiable evidence of our on-chain holdings and liabilities and gives our users the reassurance that their funds are safe with us.”

Ben Zhou, co-founder and CEO of Bybit,

Direct PoR verification is accessible to all users that have deposited funds in their trading accounts — including spot, futures, options and unified margin accounts. The verification process currently supports Ethereum, Arbitrum, BNB Smart Chain, Optimism, Polygon, Avalanche and TRON.

By revealing its PoR, ByBit intends to prove that the exchange owns the reserve and that the firm has access and ownership over those assets. Zhou concluded that “the general adoption of PoR by crypto exchanges is a positive development for the blockchain industry.”

Bybit is just the last of many cryptocurrency exchanges to have released its PoR to reassure its users that it will not soon collapse as FTX did. Some recent examples are Crypto.com and the world’s top cryptocurrency exchange Binance. In Binance’s case, there are still some unanswered questions.

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