🔍 CRYPTO KNOWLEDGE NIGHT
13 NOVEMBER 2026

PROOF OF RESERVES:
WHAT DOES IT ACTUALLY PROVE?

Many crypto users see an exchange publish a Proof of Reserves (PoR) report and assume their funds are completely safe.

But proving reserves is NOT the same as proving complete financial safety.

📚 WHAT IS PROOF OF RESERVES?

Proof of Reserves is a transparency method that allows an exchange to demonstrate that it controls certain on chain assets and compare them with included customer balances.

🔹 Merkle Tree:
A cryptographic structure that helps users verify whether their balance is included in a report.

🔹 zk-SNARK:
A cryptographic method that can prove certain calculations without revealing all underlying private information.

⚠️ WHAT PoR DOES NOT GUARANTEE

1️⃣ It is a snapshot, not a real time guarantee.
2️⃣ It does not necessarily cover every off chain liability.
3️⃣ It cannot guarantee future withdrawals.
4️⃣ It does not prove an exchange will remain solvent forever.

✅ 4 THINGS EVERY USER SHOULD CHECK

• Check the report's snapshot date.
• Check which assets and liabilities are included.
• Understand the verification methodology.
• Verify your own account balance where the exchange provides this facility.

💡 Remember:
Transparency is valuable, but understanding what is being verified is even more important.

What do you check first when an exchange publishes its PoR report?
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