A verification mechanism that lets users independently confirm, through cryptographic means, whether their own balance is genuinely included in an exchange's total claimed assets — rather than simply taking the exchange's word for it. Its core tool is the <a href="/en/glossary/blockchain-fundamentals/merkle-tree/">Merkle Tree</a>, but what it proves is only a snapshot at a specific point in time, not a guarantee that the exchange remains fully solvent at every moment afterward.