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Gate Launches PoSEC (Proof of Security): A Detailed Look at the New Transparency Framework and Reported Cold Storage Metrics
On November 5, 2026, Gate officially introduced Proof of Security, or PoSEC, positioning it as a new framework focused on asset storage structure and extreme-risk coverage. The initiative aims to expand transparency beyond traditional reserve checks by publicly disclosing how platform assets are distributed between cold storage and hot wallets, and by quantifying whether cold storage alone could cover user assets in a defined extreme scenario. The first reported snapshot, taken at 00:00 UTC on November 4, 2026 (or equivalently referenced around 08:00 UTC+8 in some materials), shows a cold storage coverage ratio of 104.58 percent, with 88.26 percent of the reported storage structure held in cold storage and 11.74 percent in hot wallets. An independent third-party review of the data was noted as underway at the time of the announcement, with results to be published upon completion

This analysis examines the four core points surrounding the launch, incorporating the available percentage figures and related structural details for a fuller picture of what PoSEC discloses.
1. Gate has launched PoSEC (Proof of Security), a new system designed to provide verifiable insight into security posture
PoSEC is presented as a dedicated security-attestation framework that goes beyond simply confirming the existence of reserves. Its central purpose is to answer a specific question: if all assets held in hot wallets were lost, could the qualifying cold-storage holdings still cover the full amount of user assets under the stated calculation methodology?

A coverage ratio of 100 percent or higher is defined as the threshold at which cold storage alone would be sufficient to meet that coverage standard. The inaugural snapshot reports 104.58 percent. This figure is calculated by comparing the reported cold-storage share against the user-asset share drawn from the relevant data set. By publishing both the storage distribution and the resulting coverage ratio, PoSEC seeks to make the platform’s storage architecture more observable. Gate has described the framework as complementary to its existing Proof of Reserves (PoR) disclosures. Earlier PoR data had indicated an overall reserve ratio in the range of approximately 118.49 percent (with total reserves reported near $8.69 billion against user liabilities in the preceding period).

PoSEC shifts the focus from aggregate reserve adequacy to the location and accessibility of those assets.
The launch materials emphasize that PoSEC is intended to establish a clearer, quantifiable standard that other platforms could potentially adopt. The data snapshot itself is time-stamped, and the platform has indicated that subsequent periods will continue to be reported under the same methodology.

The framework was introduced to increase transparency around the security and protection of users’ digital assets
Traditional Proof of Reserves primarily addresses whether an exchange holds assets at least equal to (or greater than) user balances. PoSEC adds a second layer by disclosing the split between online-connected (hot) wallets and offline or independently custodied (cold) holdings, and by testing coverage under an extreme-loss assumption for the hot-wallet portion.
According to the November 4 snapshot, cold storage accounted for 88.26 percent of the reported storage structure while hot wallets accounted for 11.74 percent. The resulting cold-storage coverage ratio of 104.58 percent indicates that, under the platform’s stated calculation, the qualifying cold-storage amount exceeds the user-asset amount used in the comparison. This dual disclosure—storage percentages plus the coverage ratio—aims to give users a more granular view of how assets are segregated and protected.
Gate has noted that cold-storage assets must satisfy specific criteria to qualify: they are not used directly for routine deposits and withdrawals, they are held offline or under independent custody, transfers require multi-party authorization, and the holdings must be independently verifiable. The inclusion of certain traditional assets (such as independently custodied securities or Treasuries) alongside offline digital assets is part of the reported cold-storage composition. By making these structural percentages public and subjecting the figures to third-party review, the initiative seeks to raise the baseline of observable information available to users regarding asset protection practices.

Reported cold storage coverage stands at 104.58 percent
The 104.58 percent cold storage coverage ratio is the headline metric of the initial PoSEC disclosure. It is derived from the November 4, 2026 snapshot and is presented as evidence that, under the defined methodology, cold storage exceeds the relevant user-asset baseline by 4.58 percentage points.
A ratio at or above 100 percent is interpreted within the framework as meaning that cold storage alone would be sufficient to cover all user assets even if the entire hot-wallet balance were unavailable. The 104.58 percent reading therefore sits above that threshold. Supporting context from the same period includes the 88.26 percent cold-storage share and the complementary 11.74 percent hot-wallet share. Earlier reserve disclosures had shown an overall reserve ratio of approximately 118.49 percent, indicating platform-owned assets in excess of pure user liabilities; PoSEC layers the storage-location analysis on top of that reserve picture.
It is important to note that the coverage calculation compares shares that, in some explanations, draw from related but not necessarily identical snapshot timings. The platform has stated that an independent third-party audit is examining asset authenticity and control, valuation methods, statistical scope, and the coverage computation itself. Publication of the audit report is expected to provide additional verification of the 104.58 percent figure and the underlying classifications.

88.26 percent of the reported storage structure is held in cold storage
The 88.26 percent cold-storage allocation is the structural counterpart to the coverage ratio. It indicates that the large majority of the assets included in the snapshot are maintained in environments designed to minimize continuous online exposure. The remaining 11.74 percent resides in hot wallets, which are necessary for operational liquidity, rapid deposits, withdrawals, and trading activity.
Cold storage, by design, keeps private keys offline or under independent custodial arrangements that require multi-party approval for movement. This separation reduces the attack surface associated with internet-connected systems. The 88.26 percent figure, when paired with the 104.58 percent coverage ratio, forms the quantitative core of the PoSEC disclosure: a high proportion of assets is reported as offline or independently held, and that portion is calculated to exceed the user-asset baseline used in the coverage test

The criteria for inclusion in the cold-storage category are explicit: assets must not participate directly in daily deposit-and-withdrawal flows, must be offline or independently custodied, must require multi-party authorization for transfers, and must be verifiable. These conditions are intended to ensure that the 88.26 percent figure reflects holdings with meaningfully lower online-risk profiles. The complementary 11.74 percent hot-wallet allocation represents the operational buffer required for platform functionality.
Putting the percentages together
The reported numbers form a consistent internal picture within the PoSEC methodology:
Cold storage share: 88.26 percent
Hot wallet share: 11.74 percent
Cold storage coverage ratio: 104.58 percent
These figures sit alongside earlier PoR data showing an overall reserve ratio near 118.49 percent. Together they illustrate both the quantity of reserves and the predominant storage location of those reserves. The framework does not claim to eliminate all operational or custody risks; rather, it supplies a transparent, percentage-based view of storage structure and a defined stress-test metric for hot-wallet loss. Ongoing third-party verification is intended to strengthen the reliability of the published percentages

Broader context and ongoing process
PoSEC is presented as an incremental step in the evolution of exchange transparency practices. By focusing on storage architecture and extreme-scenario coverage, it addresses a dimension that pure reserve-ratio disclosures do not fully capture. The initial 104.58 percent coverage reading and the 88.26 percent cold-storage allocation provide concrete, publicly stated benchmarks. Users and observers can monitor future snapshots for changes in these percentages and can review the forthcoming independent audit report for additional confirmation of methodology and data integrity

All figures referenced above are drawn from Gate’s published PoSEC materials and contemporaneous reporting of the November 4–5, 2026 disclosures. Market and operational conditions continue to evolve, and subsequent snapshots may reflect updated percentages. This overview is provided for informational purposes and does not constitute investment, legal, or security advice.#WCTCS9