Calling CoinEx Onchain a “fully decentralized” protocol might be inaccurate. Essentially, it’s an asset verification solution operated by a centralized exchange, deeply embracing and utilizing decentralized technology and transparency principles. At its core, it doesn’t attempt to build another independent blockchain, but rather anchors its critical operational data to recognized decentralized public chains like Bitcoin and Ethereum, thereby gaining immutable trust endorsement. For example, all publicly disclosed cold and hot wallet addresses and their asset changes are permanently recorded on the corresponding blockchains, allowing anyone to independently audit them on-chain. The decentralization of this data is consistent with the Bitcoin network itself, relying on the consensus of over 15,000 full nodes globally.
However, the generation, updating, and presentation processes of the CoinEx Onchain system still contain centralized components. Its core Merkle tree asset proof is currently generated by CoinEx’s servers every 24 hours. While the generated root hash is public and traceable, the collection and computation of data sources remain platform-driven. However, its design significantly reduces the risks of single-centralization through multiple elements: First, its open-source verification tools allow any user to independently verify whether they are correctly included in the Merkle tree, a process independent of CoinEx’s servers; second, its publicly available on-chain address assets are real-time and unforgeable, fundamentally different from the internal database tampering in the 2022 FTX incident, where FTX’s so-called “proof of assets” was completely detached from real on-chain data, while CoinEx Onchain’s on-chain reserves can be monitored by all third parties.
At the crucial wallet control level, CoinEx employs a highly decentralized multi-party computation and multi-signature scheme to manage assets. For example, its main Bitcoin cold wallet uses a 7/15 multi-signature mechanism, meaning that seven private key shards distributed across different geographical regions and responsible parties are required to authorize the use of funds, and no single person or team can independently control more than 10% of the signature weight. This design distributes the risk of asset custody from “trusting a single entity” to “trusting a pre-defined, verifiable cryptographic mechanism.” According to its 2025 security transparency report, over 98% of user assets are stored in multi-signature or MPC-managed addresses. The physical location and access permissions of private key sharding are overseen by an independent risk committee, maximizing the simulation of the spirit of decentralized custody.
Therefore, the best definition of CoinEx Onchain is a “hybrid model”: it strictly adheres to the highest principle of public verifiability of decentralized blockchains, but retains necessary centralized efficiency in user experience, data aggregation, and system maintenance. It achieves “decentralization at the data layer” and “decentralization of verification rights”—every user can become an auditor. Its value does not depend on CoinEx’s unilateral claims, but on the consistently maintained reserve ratio of over 100% in its on-chain addresses, a ratio that has remained stable through over 20 stress tests with market volatility exceeding 50% over the past three years. This design cleverly balances the high friction costs of a fully decentralized system with the efficiency and user experience requirements of centralized platforms, providing the industry with a verifiable, single-point-of-failure-resistant, and transparent path.