Bybit, the world’s third most visited crypto exchange, announced on Monday, December 12th, that it has implemented a Proof of Reserves system that allows users to verify the company's holdings directly. The system uses Merkle Tree to enable users to quickly verify their assets deposited in Bybit and authenticates that Bybit holds all the users' assets 1:1.
The cryptocurrency exchange pointed out that with the release of the Merkle Tree, Bybit has further demonstrated its robust finances and commitment to full transparency.
Users of the crypto exchange can use their Merkle Leaf code to check that their assets are recorded as liabilities in Bybit’s reserves. They can also verify Bybit’s ownership of the wallets and check that assets are held in a 1:1 ratio.
Bybit explained that Direct Proof of Reserves verification is available to all users with equity in the following: Trading accounts, which include spot, futures, options, and unified margin accounts
Funding accounts, which include crypto holdings and balances held in “Bybit Earn” products.
Bybit also added that the verification is available for assets on several blockchains, including Ethereum, Arbitrum, BNB Smart Chain, Optimism, Polygon, Avalanche and TRON. Bybit conducts regular snapshots to ensure equilibrium and the highly liquid nature of their holdings.
While commenting on this latest development, Ben Zhou, co-founder and CEO of Bybit, said;
“At Bybit, we believe that transparency and accountability are crucial to building trust in the cryptocurrency industry. 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."
Bybit users can securely verify the contents of Bybit’s reserves
Bybit said it developed the Merkle Tree from the beginning and the solution can securely verify the contents of Bybit’s reserves down to the granular details with the clarity and accessibility blockchain has to offer. Bybit has also completed wallet ownership verification and published detailed guides on how to conduct self-verification of user assets and verification of Bybit’s ownership of its wallets.
The CEO added that;
“The general adoption of Proof of Reserves by crypto exchanges is a positive development for the blockchain industry as we come together to rebuild trust using the very technology we are advocating for. We want to normalize transparency and accountability in the digital asset space.”
Bybit added that it has recently implemented a number of initiatives, including:
- Publishing the contents of its Bitcoin and Ethereum wallets as an initial step, viewable via a Nansen dashboard;
- Ensuring flawless withdrawals in parallel to investing in building a vigorous Proof of Reserves mechanism;
- Enhancing its risk management controls to more closely comply with KYC and AML requirements and regulations; and
- Carrying out regular attestations.
Zhou further explained that;
“Our mission is to be a ‘crypto ark’ for the world. It is, therefore, critical for us to demonstrate the highest standards of accountability and responsibility. This past year has been challenging, but the crypto industry has matured as a result, and leading players have risen to the challenge and demonstrated true resilience. We remain determined to continue to democratize financial services and provide access to the incredible opportunities of Web3.”
Bybit is a cryptocurrency exchange that was launched in 2018 and offers a professional platform where crypto traders can find an ultra-fast matching engine, excellent customer service and multilingual community support. The low Bybit fees make it one of the fastest-growing cryptocurrency exchanges at the moment. Furthermore, Bybit reviews have generally been positive, as the exchange has provided traders with the necessary tools to trade successfully.