Cryptocurrency exchange, BitMEX, has launched a system that will allow all depositors to self-verify their liabilities in the company’s total liability balance sheet.
Announcing this in a Twitter post, the company stated its Proof of Liability (PoL) system was now live and functional. All BitMEX depositors are now allowed ti self-verify their liabilities without a third-party auditor.
Also, client privacy is better preserved because account balances are randomly split into multiple leaves of the Merkle tree. Reserve and Liability snapshots will be published twice a week, on Tuesdays and Thursdays.
BitMEX also stated that to search for one’s liability in the leaves of the Merkle tree, depositors could use their “accountNonce” for multiple snapshots or just the “Nonce” for individual snapshots.
According to a blog post by the exchange,
“Once you have the nonce, you can search across all the leaves of the Merkle tree, looking for a collision. The leaves where this collision occurs are your balance.”
BitMEX stated the nonces are available to all depositors and can be found on the website when you log into your accounts. To be more specific, they are available on the “My Account” page.
The exchange emphasized that its PoL system was not developed because of FTX failure. It is the first system where users can verify their balance is included in the total. This is done without a breach of customer privacy, making it a genuinely innovative and unconventional system.
This move by the exchange was well received by its users, who applauded BitMEX for such a system. They expressed interest in using the PoL system, and even those who exited the exchange long ago are willing to come back and try it.
