How Can Exchanges Maintain Their Transparency With The Customers

The wake of FTX collapse has seen most of these exchanges and cryptocurrency related firms, which has seen the era of other exchanges embracing the transparency route. Well not all have totally embraced it some are battling the security issues that might or possibly arise from doing so.

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Well in session which had the big arms of the crypto industry fully represented with the likes of Binance CEO and Coinbase CEO Brian Armstrong, which they say they are pretty much in support of the creator of Ethereum suggestion.

Vitalik Buterin’s suggestion of crypto exchanges is the use of the Merkle Tree which the users can verify their balances through it and it will be protected by zk-SNARK which is the (zero-knowledge succinct non-interactive argument of knowledge).
Buterin’s suggestion is;

“The simplest thing that we can do is put all users’ deposits into a Merkle tree (or, even simpler, a KZG commitment), and use a ZK-SNARK to prove that all balances in the tree are non-negative and add up to some claimed value. If we add a layer of hashing for privacy, the Merkle branch (or KZG proof) given to each user would reveal nothing about the balance of any other user.”

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