How Deribit Publishes and Verifies Proof of Reserves
Summary
The document describes Deribit’s approach to publishing proof of customer liabilities and exchange-controlled assets. It uses a modified Merkle tree to let customers identify and verify their own balance entries while concealing links between balances, accounts, and blockchain addresses. Customers can check the proof identifier and sum their entries in a daily snapshot to reproduce their part of the liability commitment.
Asset snapshots cover eligible accounts whose assets Deribit directly holds; balances at third-party custodians are excluded. The document says users can compare aggregate liabilities with disclosed on-chain assets, and describes a separate live endpoint for total initial and maintenance margin. It also explains that reserves beyond customer liabilities include insurance funds, revenue, and operational accounts. The evidence is a verification procedure and wallet address list, not an independent assessment of the method or a guarantee covering custodied assets. Daily snapshots may also differ from current balances as markets and client portfolios change.
Key ideas
- A modified Merkle tree lets customers verify their own liability entries while limiting disclosure of individual balances.
- Daily asset snapshots exclude assets held by third-party custodians.
- Customers can validate proof identifiers and calculate their committed balances from snapshot records.
- Aggregate on-chain assets are compared with liabilities, with excess reserves including insurance and operational funds.
- A live margin endpoint adds information about assets backing open positions.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.