What Makes a Transparent Crypto Exchange?
The blockchain space was founded on the principles of transparency and fairness, but evidently not all players adhere to such tenets. Crypto transparency is now more critical than ever, as opaque operations and shady dealings pose an existential threat to many exchanges. From a user perspective, the transparency of a crypto exchange should be top of mind when deciding which website to trade on.
Crypto Platform Transparency
In theory, the blockchain is highly transparent because all transactions are recorded and displayed on the digital public ledger. However, the reality gets murky when it comes to individual organizations. The FTX debacle of late 2022 serves as a harsh reminder that regardless of what a platform might claim, the best way to verify the safety of assets is to check on-chain. Crypto exchanges don’t necessarily need to tell users the answer, but instead give them the tools to find out and confirm for themselves.
The Most Transparent Crypto Exchange
Amongst CEXes, Phemex must be considered one of if not the most transparent cryptocurrency trading platform. Within the crypto community a common saying is “don’t trust, verify.” Phemex allows users to do just that with their funds, because our self-proving Proof-of-Reserve mechanism enables all users to verify that their assets are accounted for without the need to rely on a third-party auditor. Phemex has received certification from both Coingecko and CoinMarketCap on the legitimacy of its reserve data, a feat that not even many larger exchanges can claim yet. Furthermore, the Phemex crypto exchange is one of few that have released clear proof-of-solvency by also making a portion of cold wallet addresses public. Anyone can check the platform’s total liabilities and compare it to the value of assets in the cold wallet addresses. Therefore, any individual with an internet connection can independently corroborate that Phemex’s assets cover its liabilities at all times.
Not only do these innovative mechanisms verify platform solvency, they also illustrate that Phemex clearly separates customer funds from the exchange’s own funds. This means that there’s no room for financial manipulation, and that outsiders are always getting an accurate picture of Phemex’s liquidity and asset security.
Transparency of user funds is of utmost importance and Phemex shines in this regard. But it’s not the only aspect that Phemex excels at. In terms of transparent communication, Phemex always promptly alerts users of the latest platform updates whether they be for new listings, product features, or system maintenance. Phemex does not shy away or delay from announcing somewhat negative news, such as currency delistings, because users have the right to always know what’s going on in order to make informed decisions.
Further strides in crypto exchange transparency are made through user activity tracking and reporting. On Phemex, every single transaction is duly recorded and part of the user’s trading history. All platform activity including spot trading, contract trading, withdrawals, and investment account earning can be conveniently downloaded as separate reports so users can track every tidbit of their historical actions and use for tax purposes if necessary. Phemex’s trading fees are some of the most clear and competitive in the industry. Trading parameters for each trading pair, as well as maker and taker fees across every user level, are plainly displayed. Any changes are communicated with haste and a buffer time period.
By promoting platform asset transparency along with clear communications and user activity accessibility, Phemex makes a strong case to be the most transparent crypto platform present in the CEX space.