In an effort to increase transparency for cryptocurrency users, CoinMarketCap (CMC), a top market researcher and tracker in the sector, recently announced the debut of a new feature on its platform that included proof-of-reserve for centralized crypto exchanges.
Proof of reserves (PoR) is an open auditing procedure for cryptocurrency businesses that offers a fair account of the firms’ liquid assets. It gives consumers visibility into the whereabouts of their funds and helps avoid a liquidity crisis if there is a “run on the bank” and clients withdraw money in large quantities.
However, following the FTX collapse, this (PoR) transparency solution was developed by cryptocurrency exchanges in response to the now-bankrupt cryptocurrency exchange using user cash to reduce its own risks.
Many in the cryptocurrency community praised PoR because it appeared to be a move in the right direction toward an open and transparent crypto-economy.
According to the CMC announcement, in this new feature, the company’s entire assets are listed, along with the associated public wallet addresses’ balances, prices, and values.
CoinMarketCap (CMC) New PoR’s Tracker Feature
In the tweet’s comment box, the CMC gives users instructions on how to utilize the tool. The new CMC platform feature, Proof of Reserves, provides consumers with up-to-date financial details on exchanges.
The data will be updated by the PoR trackers every five minutes. Additionally, it displays information on the market pairings listed on Collateralized Debt Position (CDP), a position defined by a smart contract, collateral, and a stablecoin (produced and backed by collateral.)
Moreover, with more than $65 billion listed in the combined wallet addresses, Binance, the world’s leading crypto exchange, was used as an example in CMC’s Twitter thread. The exchange’s CEO and co-founder ZC also tweeted a link to Binance’s website along with the CMC’s new addition.
CMC inaccurately totaled all wallets given by Binance in their initial publication of the “Proof of Reserves” statistics for Binance. By communicating directly with the Binance Team, they rapidly resolved the problem, which took about 20 minutes.
According to the Tweet from CMC:
We are committed to providing up-to-date #ProofofReserves; through real-time communication with our vast network of exchanges listed on CoinMarketCap.
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