Glossary
Proof of Reserves
A cryptographic + accounting attestation that an entity (usually an exchange or stablecoin issuer) holds the reserves it claims, backing customer liabilities 1:1.
Proof of Reserves typically combines two artifacts: a Merkle-tree commitment to every customer balance (so each customer can verify their own balance is included in the audited total), and a cryptographic signature proving control of the on-chain wallets holding the matching reserves.
The pattern became standard after the FTX collapse in November 2022. Most major exchanges (Binance, Kraken, Coinbase, OKX) now publish quarterly or monthly PoR reports. The technique only proves assets; liabilities still require trust unless paired with a ZK proof of solvency.