The collapse of FTX and the subsequent skepticism of crypto exchange reserves is sparking huge rallies for mid-cap altcoin Trust Wallet Token (TWT).
Trust Wallet is a non-custodial app that allows users to have full control over their crypto assets, as opposed to leaving them on a centralized exchange where the platform technically holds the keys to assets.
Users of Trust Wallet can also stake their crypto assets, access certain decentralized applications and exchange coins.
After it was revealed that FTX had ten times more liabilities than liquid assets on its balance sheet, a wave of scrutiny pushed multiple crypto exchanges into disclosing their reserves to prove solvency, including Coinbase, Kraken and Gate.io.
The scrutiny also affected the values of digital assets with TWT outperforming the crypto markets at large. The altcoin managed to rally a total of 189% from a seven-day low of $0.95 to a high of $2.75. The coin has retraced since and is changing hands for $2.27.
Decentralized exchange dYdX (DYDX) also outpaced the broader crypto markets, potentially also benefiting from the sentiment of uncertainty surrounding centralized exchanges and platforms. The altcoin surged from a weekly low of $1.32 to a high of $2.78 before correcting to its current value of $2.45.
Binance CEO Changpeng Zhao led the charge for transparency last week when he suggested that all crypto exchanges produce proof-of-reserves to prove customer assets are backed on a 1:1 basis.
All crypto exchanges should do merkle-tree proof-of-reserves.
Banks run on fractional reserves.
Crypto exchanges should not.@Binance will start to do proof-of-reserves soon. Full transparency.— CZ ? Binance (@cz_binance) November 8, 2022
Merkle Trees help encode blockchain data more efficiently and securely and can assist in quickly verifying information without revealing an entire data set.
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Featured Image: Shutterstock/bestfoto77/INelson
