The recent liquidity crisis on the FTX exchange has caused a big crisis of trust in the crypto market. On November 9, the price of FTT fell by more than 70%, BTC fell below $16,000, and the prices of most cryptos plummeted too.
On November 10, MEME Crypto Futures Trading Exchange will publish the Proof of Reserves to increase transparency. At the same time, MEME is studying Merkle Tree’s Proof of Reserves solution. And we will regularly provide third-party audit reports issued by global authorities.
MEME Crypto Exchange supports multiple accounts (wallet/mailbox)
MEME supports wallet/email login, which perfectly compatible with DEX and CEX. Users can login with their own wallet without KYC authentication. The user’s assets are still stored in the wallet, and the transaction is safer and more assured.
Will Proof of Reserves be the ’antidote‘ to crypto “quake”? We will take you to explore what Reserves and Merkle Trees mean and how they work.
What is the Proof of Reserve?
If there’s one thing that can improve crypto, that it’s convincing each crypto exchange to adopt a Proof-of-Reserve system, and MEME crypto exchange is already on the move.
Proof of Reserves means that a crypto exchange’s custodial business should create public credentials about its reserves, which matching proofs of user balances (liabilities).
Theoretically: Proof of Reserves + Proof of Liability = Proof of Solvency
How does Merkle Tree work?
Merkle Tree is one of the Proof of Reserves schemes that MEME intends to take. It is a tree that stores hash values. In a complex data structure, all data groups are linked together like branches and leaves. Any small adjustment will change the overall data result. So the validation of Merkle Tree data is more complex and accurate.
As shown in the figure, we have 4 pieces of data at the bottom layer, and each piece of data is the balance and id of a user. We hash the four data separately to form the leaves of the Merkle Tree, and the top node is called the root.
When any of the following nodes changes, the hash value of the root of the tree will change. Under such a structure, the financial fraud of the company will be immediately identified. This recording method using smart contracts is even more difficult to tamper with than the traditional bank’s deposit reserve system.
In addition, MEME Crypto Exchange also mentions Proof of Finance, which is a document that discloses asset reserves in real time and an important means of verification of reserves.
The new actions of major crypto exchanges on the issue of asset information transparency will bring new access rules to the crypto world. This will encourage all platforms and projects to make greater efforts to protect users’ assets while reducing platform risks, and creating a better environment for the crypto industry.
MEME Exchange Global Operations Team
November 10, 2022