CoinMarketCap launches tracker for cash reserves of exchanges
CoinMarketCap launches tracker for cash reserves of exchanges
Crypto

CoinMarketCap launches tracker for cash reserves of exchanges

By Andrea Porcelli - 26 Nov 2022

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A very recent innovation is coming to us from CoinMarketCap reverses exchange, which has decided to add a new dashboard that will track the liquidity reserves of exchanges. 

The tool allows users to monitor exchange liquidity by displaying the total assets and addresses of public wallets, along with the balance and value of the displayed wallets.

As The Cryptonomist has already explained in previous articles, the FTX collapse was an event that caused a lot of damage to the cryptocurrency ecosystem, but at the same time it gave awareness of what we need: more transparency. 

Displaying the cash reserves of exchanges is the perfect move by CoinMarketCap 

More transparency means more security, that’s the message CoinMarketCap wants to send to all investors in the crypto world. The implosion of the FTX system, created by the controversial Sam Bankman Fried, has brought distrust to entrepreneurs. The market has been really affected, and therefore, following Binance’s advice, cryptocurrency tracking platform CoinMarketCap has included Proof of Reserves. 

“New CMC feature: Proof of Reserves of exchanges. Proof of Reserves (PoR) provides transparency on cryptocurrency reserves through auditable audit practices.”

So writes CoinMarketCap’s Twitter account.

The “Proof of Reserves” (PoR) tracker analyzes active cryptocurrency exchanges in the sector, and shows transparent data on their real liquidity level. CoinMarketCap’s PoR information is also available for Bitfinex, ByBit, Crypto.com, Deribit, KuCoin, Huobi, and OKX. 

According to CoinMarketCap’s statement, the PoR tracker, will update every 5 minutes. 

Binance at the forefront of tracker launch

Very happy with this newly brought in solution is Binance CEO and co-founder Changpeng Zhao. In a tweet, he showed his full support for CoinMarketCap, explaining that he thinks it is a great addition to improve transparency. 

On Twitter, the crypto community was very pleased with this new feature.

Binance was used as an initial example, with over $65 billion listed in its combined wallet addresses.

Zhao was one of the first to promise more information about his exchange’s funds and movements in the wake of the liquidity crisis and subsequent FTX bankruptcy. On 10 November, Binance launched a new “Proof of Assets,” page showing the company’s addresses, funds, and wallet activity. 

Following Binance’s example, many other platforms in the industry have begun to make their financial reserve data public. Five other crypto exchanges have publicly announced that they are conducting comprehensive reserve testing audits: Kraken, Gate.io, BitMEX, Coinfloor, and HBTC

Following Binance, Crypto.com also appeals for transparency

A wave of goodwill is sweeping the cryptocurrency world. Crypto.com is calling on all exchange platforms to publish their Proof of Reserves report. It is the company’s CEO, Kris Marszalek, who is calling them out. 

An initiative that could turn the cryptocurrency curve upward.

Indeed, users are currently hesitant and prefer to sell at a loss, fearing a new drop soon.

This message comes after Crypto.com suspended trading through Solana, preferring to invite its users to use the Cronos and Ethereum networks, which appear to be less affected by the FTX crisis. 

A preventive measure announced via e-mail to its users to avoid causing further damage. The latter has in fact seen its price halved. This is due to the association of $SOL with Sam Bankman-Fried, the founder of Alameda Research and FTX.

The whole market is connected, so it is necessary to know what one is getting into by investing on this or that platform. Hopefully, this event is only helpful for more transparency in the cryptocurrency world.

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