[PoR] Verification Snapshot Explained
The amount of your total assets may differ from the snapshot of value due to the existence of debts (negative in net asset calculation) in margin trading or Crypto Loans.
Net Balance and Performance
Since Poloniex offers products of margin trading, Crypto Loans, and futures trading, each user’s balance of each crypto asset may be comprised of assets and debts. A user’s balance of a particular crypto can be negative, but their total net balance across all crypto assets should not be negative (as all loans are fully collateralized).
Example:
Assume User A deposits 10,000 USDT to Poloniex, then uses 4,000 USDT as collateral to borrow 20,000 TRX (at a rate of 1 TRX = 0.1 USDT). The following table shows the balance sheet of User A:
| TRX (Price: 0.1 USDT) | USDT (Price: 1 USDT) | Total Net Balance (USDT) | |||
| Asset Amount | Debt Amount | Asset Amount | Debt Amount | ||
| User A | 20,000 | 20,000 | 10,000 | 0 | 10,000 |
If User A then trades 20,000 TRX for 2,000 USDT with User B (who also deposits 10,000 USDT), their balance sheet would look like this after the trade is executed:
| TRX (Price: 0.1 USDT) | USDT (Price: 1 USDT) | Total Net Balance (USDT) | |||
| Asset Amount | Debt Amount | Asset Amount | Debt Amount | ||
| User A | 0 | 20,000 | 12,000 | 0 | 10,000 |
| User B | 20,000 | 0 | 8,000 | 0 | 10,000 |
In this case, User A's TRX balance will amount to -20,000, which cannot be used as a valid node in a Merkle tree as it only covers one asset: TRX. In terms of the total net balance, User A is still at 10,000 USDT.
We want to provide proof of the following facts within a reasonable time window:
1. Each Poloniex user’s assets are part of our claimed total user balance shown in the snapshot. Users can verify our claimed total user balance against the assets held at Poloniex-controlled addresses using a blockchain explorer.
2. As each user’s total net balance is non-negative, Poloniex cannot create dummy accounts with a negative balance to reduce the size of our verified reserves artificially.
Accounts and assets involved in calculation:
| Account | Asset Category | Calculation Method |
| Spot | Available assets, in-order assets, margin loan assets, and locked assets | All assets in different categories are summed up to calculate the net asset. |
| Grid Trading | Available assets | |
| Earn | Assets | |
| Futures | USDT-margined assets |
*Note: The snapshot of one coin includes the coin asset of all categories in all accounts under one UID.
Poloniex reserves the right in its sole discretion to amend, change, or cancel this announcement at any time and for any reason without prior notice. The above is for information purposes only and Poloniex makes no recommendations or guarantees in respect of any virtual asset, product, or promotion on Poloniex.