Proof of Reserves (PoR) is a method used by crypto platforms, such as exchanges, to demonstrate that all user funds are fully backed. In this analysis, I reviewed the Reserve Ratio of five major exchanges: Binance, Bybit, OKX, Kraken, and Coinbase. The Reserve Ratio is calculated as the Net Customer Balance divided by the Exchange Balance.
đ„ 1. Binance
Binance performs excellently, consistently maintaining a Reserve Ratio above 100%. Reports are published monthly and in a timely manner.
đ„ 2. OKX
OKX also shows strong performance, with a Reserve Ratio always above 100%, though typically slightly lower than Binance. Their reports are also published monthly and on time.
đ„ 3. Bybit
Bybit provides solid proof of reserves, with a Reserve Ratio often ranging between 105% and 115%. They recently increased their reporting frequency from every two months to monthly.
đ 4. Kraken
Kraken maintains a Reserve Ratio above 100%, but has only released four reports since November 22, 2022. More recent and frequent updates are needed.
đ 5. Coinbase
Coinbase has not published a single Proof of Reserves report. For an exchange of its size, this lack of transparency is a significant shortcoming.
In conclusion; Binance and OKX are leading the way with solid reserve ratios and consistent monthly reports. In my opinion, they set the standard for the industry. Bybit and Kraken are also making good progress, with notable improvements in their reporting. However, the complete absence of a Coinbase Proof-of-Reserves report is definitely something which needs attention.
Written by maartunn
