The Importance of "Proof of Reserve" for CEX Users

After the collapses we’ve seen in the past, transparency has become the most important feature of any centralized exchange. Proof of Reserve (PoR) is a system where exchanges use cryptographic proofs to show that they actually hold the assets their users have deposited. As a user, you should prioritize trading on platforms that provide regular, third-party audited PoR reports. This level of transparency builds trust and ensures that the exchange is not misusing customer funds for their own investments. While self-custody is always the goal, choosing a transparent exchange is the next best thing for your active trading capital.