Proof of reserves is a procedure intended to show that a custodian holds assets corresponding to customer balances included in a review. Some systems let customers verify that their balance was part of an anonymized Merkle tree.
Assets and liabilities both matter
Wallet ownership evidence can show control of certain assets, while customer-balance data represents in-scope liabilities. A complete interpretation depends on what entities, products, dates, and assets the review covers.
Read the scope before reading the ratio
A reserve percentage only describes the entities, dates, assets, customer balances, and products included in that specific review.
A snapshot is not continuous solvency proof
Reserve reports may not reveal every liability, encumbrance, related company, or later movement of assets. They are one transparency signal, not a replacement for understanding custody and counterparty risk.
A verification date is a snapshot
Balances and liabilities can change after the review. Regular repetition and clear methodology make a reserve program more informative, but do not guarantee future solvency.
Sources
Educational information, not investment advice.