Aark is a decentralized exchange that has its reserves stored on a smart contract and fully transparent through this link:
https://arbiscan.io/address/0x7a5df878e195d09f1c0bbba702cfdf0ac9d0a835#tokentxns
The USD amount in the link shows the spot assets value within the Aark protocol. The leveraged TVL displayed on the Aark LP webpage is the ‘actual reserve * leverage’.
At all times and without exception, liquidity providers are able to verify the amount of assets provided to Aark. For additional transparency, the major contracts are as followed:
| Vault | 0x7A5df878e195D09F1C0bbba702Cfdf0ac9d0a835 |
|---|---|
| OctRouter | 0x4213d42A5A6Bd38Ef9A166b179D1f360FF536D39 |
| PriceOracle | 0xbCdb9B040abF11D561b20c78E38130A8FfEB0364 |
| MasterRouter | 0x85BBe848e12472EB1beE06bE7e123Bdee42c7943 |
Many prominent cryptocurrency exchanges and DeFi platforms have adopted PoR to enhance their credibility and assure users of their financial stability. Leading exchanges such as Kraken, Coinbase, and Binance are among those that have incorporated PoR practices. These platforms periodically publish audit reports or cryptographic proofs demonstrating that their assets exceed or match user deposits.
The crypto industry began implementing Proof of Reserves in response to increasing demands for transparency and trustworthiness in the DeFi and cryptocurrency sectors. In November 2022, FTX, one of the world's largest cryptocurrency exchanges, faced a sudden collapse due to a liquidity crisis and alleged misuse of customer funds. The exchange was unable to cover withdrawals, leading to bankruptcy and significant losses for users.
During the incident major exchanges responded:
https://twitter.com/cz_binance/status/1590693950020472834?ref_src=twsrc^tfw|twcamp^tweetembed|twterm^1590693950020472834|twgr^7e9aba800230feec39d39564ab8f54376e19bce9|twcon^s1_&ref_url=https://coinmarketcap.com/academy/article/proof-of-reserves-these-exchanges-are-adhering-to-the-new-standard
https://twitter.com/brian_armstrong/status/1590088908414803969?ref_src=twsrc^tfw|twcamp^tweetembed|twterm^1590088908414803969|twgr^7e9aba800230feec39d39564ab8f54376e19bce9|twcon^s1_&ref_url=https://coinmarketcap.com/academy/article/proof-of-reserves-these-exchanges-are-adhering-to-the-new-standard
Yet, such exchanges are still dependent on Third-Party Audits. For insance, despite Binance’s PoR audit conducted by Mazar Group, controversy increased as the auditor ceased to work with crypto clients, including Binance, to provide further reserve audit services. Mazar went as far as to specify that the audits:
*“… do not constitute either an assurance or an audit opinion on subject matter. Instead they report limited findings based on the agreed procedures performed on the subject matter at a historical point in time.”