By George Ward
A new mechanism has been launched by the Bitmex team, enabling all depositors on the crypto platform to self-verify personal liabilities on the exchange’s balance sheet for total liabilities.
The newly launched proof of liabilities mechanism does not require the involvement of a third party. However, it works to protect the privacy policies of its clients using Merkle tree. Merkle tree is an advanced cryptographic data framework.
A detailed explanation of how the Merkle tree works is available in a blog post on the Bitmex website. Accompanied by a series of snapshots, the company’s liabilities and reserves are updated via publications on Tuesdays and Thursdays.
The updates often include proof of reserves and proof of liability twice every week. The updates are, however, necessary to display the latest financial stability of the Bitmex company.
Hence, users can broaden their knowledge about the proof of reserves and proof of liability as it relates to Bitmex by downloading snapshots of the companies’ liabilities and installing an open-sourced tool via GitHub. This tool is structured to run on multiple source applications and terminals, such as Linux and Mac, using some series of commands.
Notably, Bitmex users are also responsible for several cases involving arbitrary and cross-referencing against the published exchange liabilities made available on the personal portal of individual clients.
Framework and State of Bitmex Proof of Liabilities
Bitmex’s new tool is almost at the completion stage, with the team noting that only a few sections are left to be completed. Some of such sections include providing the Bitmex clients the ability to check balances in the Merkle tree’s proof of liability.
The team remarked that it would include this feature within the interface of the front-end users within the next few weeks. The new system’s second aspect is the implementation process and the inclusion of other coins, such as USDT and ETH.
However, the new system of the Proof of Liability (PoL) brought about by Bitmex became necessary following the collapse of crypto exchange giant FTX and its relatively linked trading partners, Alameda.