Exchanges Glossary definition

Crypto glossary

Proof of Reserves

Proof of reserves is a process exchanges use to show that customer assets are backed by on-chain holdings or audited balances.

Why It Matters

The practical version.

It can improve transparency, but does not by itself establish solvency or safety. Liabilities, controls, access restrictions, and the timing and scope of evidence also matter.

Whether liabilities are included

Audit frequency

Asset quality

Withdrawal behavior after stress events

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