Reserve breakdown
| Metric | Value |
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Risk-adjusted ratio vs self-issued token haircut
Liabilities, reserves and stablecoin haircut held at your current inputs — only the self-issued token haircut moves. This is the single assumption that swings a proof-of-reserves report from reassuring to alarming.
| Haircut | Risk-adjusted reserves | Risk-adjusted ratio |
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A clean headline ratio can hide a concentrated one
Proof-of-reserves reports answer a narrow question: does the exchange currently hold, in wallets it can prove control of, at least as much value as it owes customers. That's a real and useful check, but the raw ratio treats a dollar of BTC, a dollar of USDC, and a dollar of a token the exchange itself created and controls the supply of as interchangeable. They are not. FTX's published reserves in 2022 looked adequate on paper largely because a huge share of them were FTT — a token FTX minted, whose price FTX itself could move, and which had nowhere near enough independent market depth to be liquidated at anything close to its marked value. The bankruptcy vs liquidation price calculator and socialized loss / clawback calculator model what happens inside an exchange's risk engine after a shortfall is already underway; this calculator is upstream of that — it asks whether the shortfall exists on paper in the first place.
This tool takes the raw reserve ratio (verified reserves ÷ customer liabilities) and produces a second, risk-adjusted ratio by applying a haircut to reserves held in the exchange's own token (illiquid, circular collateral — the FTT lesson) and a smaller haircut to stablecoin reserves (depeg-under-stress risk, the way USDC briefly traded below $1 during the March 2023 SVB episode). The bigger the gap between the raw ratio and the risk-adjusted ratio, the more the exchange's apparent solvency depends on assets that are hard to actually realize in a crisis rather than external, independently liquid collateral.
None of this is live exchange data — every number here is an input you control, so you can plug in a real published proof-of-reserves report and stress-test its composition, or just explore how sensitive the "backed" story is to the haircut assumption. A raw ratio near 100% with a heavily native-token-concentrated reserve base is the exact pattern that has preceded past exchange failures; a raw ratio near 100% built mostly on BTC, ETH and diversified stablecoins is a materially different risk profile even though the headline number can look identical.
FAQ
What is proof of reserves and what does the reserve ratio actually measure?
Proof of reserves is an attestation (usually a Merkle-tree snapshot of user balances plus a signed list of exchange-controlled wallets) that lets outsiders check whether an exchange holds enough assets on-chain to cover what it owes its customers. The reserve ratio is simply verified reserves divided by customer liabilities, expressed as a percentage. A ratio at or above 100% means the exchange holds at least a dollar of reserves for every dollar it owes; below 100% means customer funds are only partially backed, which is the exact condition regulators and users want proof-of-reserves reports to catch before a withdrawal run forces the shortfall into the open.
Why does this calculator haircut reserves held in the exchange's own token?
FTX's 2022 collapse is the reference case: a large share of its claimed reserves were FTT, a token FTX itself created, controlled the float of, and could not have sold in size without crashing its own price. A token like that can mark impressively on a balance sheet while being nearly worthless as real backing in a crisis, because there is no independent buyer for that much supply. This calculator applies a haircut (default 75%) to self-issued token reserves to model that illiquidity, and a smaller haircut (default 5%) to stablecoin reserves for depeg-under-stress risk, then recomputes the ratio on that risk-adjusted basis so the gap between "reported" and "realistic" becomes visible.
What counts as a safe proof-of-reserves ratio?
There's no regulatory minimum, but as a rule of thumb a raw ratio comfortably above 100% (say 105-110%+) gives some buffer for asset price swings between snapshots, and a risk-adjusted ratio that stays near or above 100% after stripping out self-issued tokens and heavily haircutting stablecoins is the more meaningful signal. The real warning sign this calculator is built to surface is a large gap between the raw ratio and the risk-adjusted ratio — that gap size tells you how much of the exchange's "backing" depends on assets it effectively controls the price of, rather than external, independently liquid collateral.
Does a reserve ratio above 100% prove the exchange is solvent?
No — proof of reserves is a snapshot of assets, not a full audit of liabilities, and it says nothing about off-balance-sheet debt, related-party loans, or whether the same collateral is quietly rehypothecated elsewhere. It also can't prove the exchange won't add new liabilities (new deposits, new leverage) the moment after the snapshot is taken. Treat a clean ratio as one input into a risk assessment, not a solvency guarantee — pair it with the exchange's audit history, insurance fund size, and how concentrated its reserves are in a token it prints itself, which is exactly what the risk-adjusted ratio in this calculator is trying to approximate.