Cryptocurrency data aggregator CoinGecko has announced plans to incorporate Proof of Reserves (PoR) into its Trust Score 3.0 methodology for centralised cryptocurrency exchanges.
In a move aimed at raising industry accountability standards, centralised cryptocurrency exchanges will be able to show transparency as regards their assets and liabilities.
Update in two phases
The update will be implemented in two phases. The first phase, which has already been completed, assigns a weightage of 1 point out of a maximum of 10 points in the Trust Score for exchanges that disclose publicly verifiable assets.
The second phase, scheduled for Q4 2023, will encompass Proof of Liability (PoL) and will assign a higher weightage for PoR in the Trust Score methodology.
CoinGecko first started tracking PoR on November 15, 2022, with the introduction of an ‘Exchange Reserves’ tab on each centralised cryptocurrency exchange’s page. This information is now reflected in the new ‘Reserve Data’ column on the Top Crypto Exchanges page.
The ‘Available’ label indicates that there is official or crowdsourced reserves information for users to explore for due diligence, while the ‘Unavailable’ label indicates no known data. An icon with a check mark indicates that a third party audit has been conducted on the exchange’s reserves.
The CoinGecko Trust Score
CoinGecko’s Trust Score was first launched in May 2019 to combat fake exchange volume data and assist users in performing due diligence. Its subsequent updates have included additional rating categories, multiple metrics, and considerations for cybersecurity.
The Trust Score 3.0 takes into account recent events that have highlighted the importance of public accountability and transparency from centralised cryptocurrency exchanges, and will be continually improved to empower users to make informed decisions.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.