Gate, a leading crypto exchange and Web3 innovator, announced that its latest Proof of Reserves (PoR) methodology passed a comprehensive security review conducted by Hacken, a pioneer in blockchain and Web3 security auditing. The accompanying report found no severe issues.
Released on January 3, the report describes Gate's PoR method as a balance of functionality and complexity and that it "contributes significantly to the field, demonstrating a clear understanding and application of key principles in blockchain technology and cryptographic systems."
Hacken's Comprehensive PoR Security Review
Hacken's security audit process involves a rigorous analysis of the code and functionality of Gate's PoR, checking it against known vulnerabilities. The review covered key areas such as dependency management, cryptographic frameworks, code quality, error handling, and testing.
Dr. Lin Han, Founder and CEO of Gate, said: "We're grateful for Hacken's thorough and diligent security review, leaving no stone unturned. Ensuring the integrity of our PoR is a commitment not only to user asset safety but also to the entire blockchain industry. Hacken plays an important role in fortifying this commitment and ensuring we continually set the bar high."
Hacken's review also outlined improvements to non-critical issues with the PoR method. Gate will further iterate and improve its PoR as part of its ongoing commitment to user asset security.
"As the digital landscape continues to evolve, the need for transparency becomes non-negotiable. At Hacken, we embarked on our Proof of Reserves journey in 2019, laying the groundwork through extensive market research. Gate has pioneered the involvement of Web3 auditors in Proof of Reserves, setting a benchmark for the entire industry. Despite these advancements, there remains a path toward seamless transparency. The next steps involve the Exchange Liabilities Test of Details and internal control assessments, which will further enhance trust within our industry.”, said Dyma Budorin, Co-Founder & CEO at Hacken.
Proof of Reserves Early Adopter and Leader
In 2020, Gate became one of the first exchanges to conduct PoR using the now-standard method of combining Merkle trees with a third-party auditing firm and independent user validation. Repeating the process in 2022, Gate then made its implementation open source following FTX's collapse. It was then upgraded in 2023 to include more regular reporting on more than 100 assets, the most of any exchange, and utilizing ZK-SNARKs for enhanced security and privacy.
The latest PoR data provided by Gate now covers 171 assets, 59 more than the previous report. The published data validates that its reserves exceed user deposits by more than 100%, with excess funds amounting to over $584 million or 15.47% of user deposits.
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Gate Team
January 22nd, 2024
