Gate.io was one of the first cryptocurrency exchanges to implement the Proof of Reserves method. The exchange’s current focus includes regularly reporting over 170 assets and using zk-SNARKs. Dr. Han believes that audited Proof of Reserves will be a basic requirement for all trading platforms.
In 2024, the cryptocurrency space is full of significant developments: governments around the world have begun to recognize cryptocurrencies as an asset class, TradFi giants have entered the big game, and the Bitcoin halving suggests it may There is a bull market on the horizon.
With increasing market liquidity and people’s tendency to invest their money more boldly, it is essential to focus on asset security. BeInCrypto sat down with Gate.io founder and CEO Dr. Lin Han to talk about the importance of Proof-Of-Reserve (PoR), the need for transparency in the industry, and the exchange’s approach to keeping user funds secure.
Proof-Of-Reserve (PoR) as New Standard on Exchanges
Gate.io is not a newcomer to the concept of Proof-Of-Reserve. In 2020, it was one of the first exchanges to conduct PoR using the now-standard method of combining the Merkle Tree with a third-party auditing company and independent user validation.
Two years later, the platform made its implementation open source following the collapse of FTX. In 2023, the method was updated to include regular reporting on more than 170 assets and use ZK-SNARK to improve security and privacy.
Although 100% PoR has become a benchmark for most centralized exchanges (CEX), it still needs to be easier for the average user to understand and complete a Merkle Tree check. Dr. Han simplifies the verification process, likening it to a collaborative game in which millions of users identify flaws in data.
The conversation turns to the broader implications of the PoR as an industry standard. Han predicts that its integration into traditional financial markets will foster greater transparency and accountability, setting a new benchmark. However, he noted that this success will largely depend on the crypto community, from data aggregators and media outlets to influencers and average users.
Gate.io: Balance between Efficiency and Security
Gate.io’s CEO delves into the debate of centralized exchanges versus decentralized platforms, highlighting the efficiency and ease of use of CEX. Despite the appeal of decentralized options, it underlines the current reliance on CEXs due to low transaction costs and ease of use.
However, it foresees a gradual shift towards decentralized platforms driven by advances in infrastructure and UX. The CEO points out once again that while users rely heavily on CEX, it is important that they pay close attention to the availability of PoR and audits. He says this is a good move to show that the funds are safe, at least for the time being.
Secure Environment for All Gate.io Users
As the CEO explores the possibility of addressing institutional needs, he underscores Gate.io’s commitment to maintaining its standards. Dr. Han highlights the strict due diligence process carried out by institutional clients and the importance of meeting their security and compliance requirements.
Dr. Han also points out that Gate.io spent many years and resources applying for licenses. It paid off as the exchange’s new clients from traditional finance cannot trade on unregulated platforms. Now, it is one of the leading cryptocurrency exchanges with licenses and approvals in different jurisdictions. Gate Group already has licenses or approvals in Malta, Lithuania, Italy, Dubai, Gibraltar, among other countries.
With an eye on innovation and user-centric solutions, Gate.io charts the path to growth and continued success in the dynamic digital asset sector
By Leonardo Perez
