In digital asset trading, asset management has always been the most important thing for users. Whether the exchange can truly manage user assets fairly, transparently, and safely is the prior factor for all users to consider before conducting digital asset trading.

As the world's first trading platform committed to providing 100% margin, Gate.io closely cooperates with Armanino LLP, a well-known American audit company, to provide users with professional and reliable asset validation services in the form of open-source, open, transparent, blockchain signature and Merkel Tree. Presently, Gate.io has completed the second 100% margin audit. Users can view the results of the Gate.io asset audit on the Armanino official website.


The Introduction to 100% Proof of Margin
In a centralized exchange for trading blockchain assets, every user’s assets are recorded by the ledger of a centralized database. The recorded assets in the database are the total amount of the user’s assets. Margin is the amount of user’s assets held by the exchange. For a cryptocurrency exchange, its margin equals the total amount of assets controlled by the exchange in the blockchain. Margin can also include the amount of fiat currency in a bank, for fiat trading exchanges. In terms of Gate.io, its fiat trading is performed in a C2C manner without holding any of users’ fiat currency. In a blockchain, 100% margin of a coin is provided, if the amount of the coin owed by an exchange is higher than or equal to the total number of the coin held by all of its users.

Details of 100% Proof of Margin of Gate.io as of November 2, 2022

The Importance of 100% Proof of Margin
Assets held by a centralized exchange can’t be monitored by the users themselves. In this sense, an exchange could potentially misuse users’ assets without their knowledge, which could lead to a situation in which the margin turns out lower than the recorded assets in the database. As a result, users would face tremendous risks, involving delayed withdrawal. Worse yet, users could be unable to withdraw their coins as a result of insolvency of the exchange. All these factors combined will diminish a users’ sense of trust in an exchange. Therefore, if the exchange wants to gain users’ trust, it must be able to prove that the margin is higher than the recorded assets in a trustworthy manner, so as to sustain sound development in the long run.


What is a Merkle tree?
Merkle tree, a binary hash tree, was invented by Ralph Merkle in 1979. Each leaf node of the tree stores the hash value of a data element. The stored data is irreversible with the hash algorithm of the tree as any changes in the data of the leaf node will lead to a different root hash. In the block of Bitcoin, every transaction is recorded through the tree structure.


How Does Gate.io Provide 100% Proof of Margin
Gate.io provides users with a reliable method that combines the mathematical algorithm and a financial audit to check the margin, including a user’s total assets on the platform; all whilst protecting users’ privacy from hacking. We adopt two methods to prove the user’s total assets and users’ margin held by Gate.io. The first method is to store each user account’s hash value of assets in the leaf nodes of the Merkle tree. The second method is to audit those assets in the leaf node of the Merkle tree and verify all the users’ margin held by Gate.io through an audit of a third party institute. Conclusively, the written audit report and the Merkle tree of the hash value of users’ total assets are open to the public through the audit of the third party. Each user, through the application of mathematical algorithms, can verify whether their assets amount is recorded accurately in the Merkle tree.

Gate.io has launched a feature that allows users to check their balance on the website. Web users can check at “Wallets” on the official website: https://www.gate.io/myaccount/myavailableproof

There are more than 1400 types of tokens on Gate.io, each of which have been verified and audited by the aforementioned auditing institute. Since the transfer of assets would involve the cold wallets and hot wallets that include numerous addresses, the audit must be done in an absolutely safe environment. To avoid safety obstacles and misoperation, we provide users with 100% proof of margin through an annual audit.

For the mainstream tokens, we will finish each audit report with the cooperation of the audit institute and publish the Merkle tree of the hash value of all users’ total assets, using an open-source verification program on Github platform.

Each user can verify the information through “Wallets”- “Available Balance Proof” on Gate.io and check whether their assets are recorded in the audit through the Merkle tree and verification program.

For other tokens, any project or individual can ask for an audit and make their assets’ Merkle tree public with the same standard, which will incur a fee. The fee standard will be set according to the difficulty of the audit, which will be determined based on whether the token has a multichain storage, PoS & Earn and privacy feature.

Gate.io is a trading platform that does not charge listing fees, only launches quality projects and provides users with proof of assets and audit reports through Merkle tree, aiming to create a safe and transparent trading environment. Any supervision, suggestions or other kinds of feedback is welcome.


For more details, please refer to What Is the Significance of Introducing Third-party Audits to the Exchange? Understand What Proof of Margin Is


Thanks for the choice and trust of every Gate.io user!


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Gate.io Team
November 7th, 2022