Proof of Reserve is an audit procedure that verifies assets held by exchanges through cryptographic proof, public wallet ownership checks, and repeated audits. Custodians provide transparent proof that on-chain reserves truly exist, demonstrating that the total tokens held and freely available on the platform are greater than or equal to the total token assets of all users. In centralized trading platforms, each user's assets are recorded through a ledger in a database. Securely proving that the platform is properly safeguarding all users' assets is a challenge that each platform must address. BTCC uses Merkle tree tools to verify platform reserves and user asset proof reports, allowing users to verify their assets within the platform.

A Merkle Tree is a cryptographic tool used to efficiently verify data integrity. It can consolidate large amounts of data into a single hash value, known as the Merkle Root. Each node at the bottom of the Merkle Tree represents an account. The balance and account name of each account are encrypted once through SHA256, and the resulting hash value is then calculated again with an adjacent hash value, proceeding layer by layer upward, ultimately resulting in the root of the Merkle Tree. If users want to verify platform reserves, they need to follow the steps to first calculate the hash of their own account, locate their position in the tree and adjacent nodes, and calculate hashes layer by layer upward until they reach the root calculated by the user. If the root calculated by the user matches the officially published one, it proves that the platform's reserves are accurate.