Proof of Reserves

Your Funds.
Fully Verified. Always.

Xchange On maintains a 100% reserve policy for all user assets. Every balance is cryptographically verifiable on-chain for greater transparency and independent verification of reserves.

Reserve Ratio

≥ 100%

All assets fully backed
Verification Method

Merkle Tree

Cryptographically tamper-proof
Audit Frequency

Monthly

Independent third-party
Asset Backing

1:1

Minimum guarantee
Process

How Proof of Reserves Works

Our four-stage verification cycle runs continuously, producing a cryptographic proof that anyone can independently audit.

Balance Snapshot

Every user account balance is captured at a specific time across all wallets (Spot, Futures, and Savings). Each balance is assigned a unique anonymized identifier.

Merkle Tree Construction

All account balances are hashed and assembled into a Merkle Tree. The result is a single Merkle Root, a cryptographic fingerprint representing every user balance. Any tampering invalidates the root instantly.

On-Chain Wallet Attestation

Our cold and hot wallets publish signed messages proving that Xchange On controls the addresses holding user assets. Reserve totals are compared against the total user liability from the snapshot.

Independent Third-Party Audit

A licensed third-party accounting firm reviews and signs off on both the Merkle Root and the on-chain balance attestations. Reports are created timely and stored immutably.

Cryptographic Technology

What is a Merkle Tree?

A Merkle Tree is a cryptographic data structure that aggregates millions of distinct records, in this case, user balances, into a single hash known as the Merkle Root.

Think of it as a mathematical fingerprint of all your funds combined. If even a single digit in any user's balance is altered, the hash cascade changes the Merkle Root — making any tampering mathematically impossible to hide.

Xchange On uses this structure so that every user can independently verify that their individual account balance was included in our reserve calculation, without exposing any other user's private data.

Combined with zk-SNARK proofs (Zero-Knowledge proofs), we are able to validate that all leaf node balances are non-negative and correctly sum to the total claimed reserve, without revealing individual account details.

Tamper-Proof

Changing any balance invalidates the entire tree root. Thus, fraud is mathematically detectable.

Privacy-Preserving

You can verify that your own balance is included without seeing anyone else's.

Instant Verification

Your Merkle proof path lets you verify inclusion in seconds without downloading the full dataset.
Protecting Customer Assets

Standards That Govern Our Reserves

Proof of Reserves is not a one-time process. These are the standing commitments that govern how we protect your funds every single day.

Xchange On maintains reserves that meet or exceed 100% of all user liabilities at all times. We do not lend out, rehypothecate, or deploy user funds for trading without explicit consent.

100% Reserve Backing Minimum

We make a new Merkle Root and full reserve snapshot every month, or whenever significant changes occur. Every audit is conducted by an independent, licensed third-party accounting firm.

Monthly Merkle Tree Audits

Our verification code is publicly available on GitHub. You can audit the methodology, run your own verification, or build on top of it. No black boxes — ever.

Open-Source Verification Tools

The majority of user funds are held in air-gapped cold wallets inaccessible to operational systems. Hot wallets are strictly limited to daily operational liquidity needs, with multi-signature controls.

Cold & Hot Wallet Segregation

Beyond the 1:1 reserve, Xchange On maintains an emergency reserve fund to protect users in the event of unforeseen circumstances such as security breaches or extreme market events.

Emergency Reserve Fund

All wallet addresses, Merkle Roots, audit reports, and reserve ratios are published publicly and updated on schedule. Any material changes to reserves will be communicated to users proactively.

Full Transparency & Disclosure

Frequently Asked Questions

Answers to the most common questions about how Xchange On's Proof of Reserves system works.

Proof of Reserves (PoR) is a cryptographic auditing method that allows a cryptocurrency exchange to publicly demonstrate it holds sufficient assets to cover all user deposits—without needing users to simply "trust" the platform.
After high-profile exchange collapses like FTX, it became clear that users need verifiable proof that their funds exist, not just promises. Our PoR gives every user an independent way to confirm their assets are safe.
No. A ratio above 100% simply means Xchange On holds more than what is owed to users – providing an extra safety buffer. It does not entitle users to the surplus. The surplus belongs to the exchange's operating capital.
Our reserves are audited by independent licensed accounting firms specialising in cryptocurrency attestation. The auditor verifies both the Merkle Root (user liabilities) and the on-chain wallet ownership (assets). Auditor details are mentioned with each report.
Yes. Xchange On's PoR snapshot includes all wallet types: Spot, Futures, and Savings balances. The snapshot captures all balances simultaneously to prevent any window-dressing of assets across wallets.
A zk-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) is a cryptographic proof that confirms all user balances in our Merkle Tree are positive and correctly summed, without revealing any individual account details. It adds an extra layer of mathematical certainty.
Xchange On publishes a new reserve snapshot on the 1st of every month. In addition, we commit to publishing an unscheduled report within 72 hours of any significant reserve change of 10% or more in any asset.