Proof of Reserves (PoR)

Proof of Reserves (PoR) is a transparency mechanism used by crypto exchanges to prove they hold sufficient assets to cover user balances. It involves third-party audits or cryptographic proofs to verify that the exchange's reserves match the total user liabilities. By providing this assurance, PoR enhances trust among users, as it demonstrates the exchange’s financial stability and integrity. This practice helps prevent fraudulent activities and ensures that users can withdraw their funds at any time without issues. PoR is crucial for maintaining confidence in the exchange's operations.