Singapore-based crypto exchange Bybit has become another major trading platform that has proven to have sufficient collateral for its users’ balances through Proof-of-Reserve.
Bybit is launching the Merkle Tree Reserve Verification System, which aims to allow users to self-verify Bybit assets as well as personal assets held on the exchange.
Merkle Tree is a hash-based mathematical data structure that collects summaries of all transactions in a block. This method is considered to be a fast data accuracy check in a decentralized way. It is considered by some crypto companies to be effective and secure for encrypting blockchain data.
The function will become available to all users who have funds in both trading and financial accounts, as well as those who use Bybit Earn to earn money. The new feature should allow clients to verify that their assets are held at a 1:1 ratio to the balance of the crypto exchange.
According to Bybit co-founder and CEO Ben Zhou, the old ways of verifying collateral weren’t reliable enough, so the company decided to upgrade the approach. The crypto exchange, represented by the CEO, promises to expand withdrawal options and strengthen control over risk management.
Earlier, the Crypto.com exchange also provided proof of user asset reserves – experts from the auditing company Mazars compared customer balances and funds on the exchange wallets.
Source: Bits
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