What you're operating
Not yet reviewed by a lawyer. This document is published in draft so you can read it before you commit money, not because it is finished. No operating company has been formed and no governing law has been set, so parts of it name gaps rather than answers. It will be reissued once counsel has been through it. Questions: info@decentralprop.com
What this document is, and what it is not
This describes what a firm operator on DecentralProp actually does, in mechanical terms, with the enforcement point for each statement.
It does not tell you whether you need a licence. It does not tell you whether running a firm is permitted where you live. DecentralProp is not qualified to answer either question, and an answer from us would be worth nothing to you: you would still need your own lawyer, and you would have paid us a deployment fee on the strength of an opinion we had no standing to give.
What we can do is make the question answerable. Most people who run a prop firm cannot get a useful answer from a lawyer because they cannot describe their own product accurately. They do not know who determines a trader's outcome, who holds the money, or who could refuse a payout. On DecentralProp those answers are precise, and several of them are enforced by on-chain programs rather than by policy, which means they can be verified rather than taken on trust.
Take this document to a lawyer in your jurisdiction. It should turn a five-meeting conversation into a one-meeting conversation.
Where this document and the platform's technical source of truth disagree on a mechanism, the technical documents are correct and this one should be fixed. Those are the protocol documentation for authority and custody, the published fee schedule for money, and the protocol's machine-readable registry of who controls what for the machine-readable version of every claim below.
1. What you operate
1.1 Things you do not do
You do not execute trades. Orders placed by traders on your storefront are filled by DecentralProp's execution engine, running on DecentralProp's infrastructure, against a price feed DecentralProp commits to. You have no access to that engine and no way to influence a fill.
You do not set the rules of an evaluation. The profit target, the maximum drawdown, the daily loss limit, and the minimum number of trading days are fixed across the whole platform.
You do not decide who passes or fails. A server-side rule engine evaluates every account against the rules that were locked to it at purchase. There is no review step and no override, for you or for us.
You do not settle challenges or release payouts. Both require a platform key that your wallet is structurally excluded from holding.
You do not hold trader funds, and you cannot freeze a trader's account.
You do not decide which account sizes your firm may sell. That is set by the size of your firm's treasury and changes as the treasury does.
1.2 Things you cannot do, enforced on-chain
The statements in 1.1 describe how the platform is arranged. The statements below are stronger: they are constraints the Solana programs impose on your own wallet, which hold whether or not DecentralProp cooperates.
| Constraint | Enforced by |
|---|---|
| You can never become your firm's settlement authority. A rotation naming the firm owner is rejected. | firm::set_risk_engine_authority |
| You can never be your firm's guardian. Deployment rejects a firm whose owner and guardian are the same wallet, and requires the guardian to be the platform guardian. | firm::deploy_firm |
| You cannot settle a challenge or move a payout. Every settlement and payout instruction requires the platform settlement authority as a signer. | firm::require_firm_settlement_authority |
| You cannot make an evaluation easier or harder. A rulebook supplied when your firm is provisioned is discarded, and the rules bound to each challenge are validated on-chain at creation. | challenge::validate_rules_envelope |
| You cannot sell an evaluation whose trader profit share is below the platform floor of 50 percent, and you cannot pay a passing trader less than the split that was locked when they bought. | MIN_TRADER_SPLIT_BPS, and the overclaim check on funded withdrawal |
| You cannot close your firm or take its residual. Owner-initiated closure does not exist. A firm winds down only through automatic insolvency, and what remains goes to a platform-wide pool. | firm::finalize_bankruptcy |
| You cannot sell an evaluation your treasury could not cover if the trader won. | Purchase-time treasury gate |
| You cannot alter the price or the fill speed of any individual trader's account. Nobody can. The engine has no mechanism for it. | Removed from the engine; enforced by a test that fails the build |
Each of these has a proof script or an automated test behind it, listed in the protocol documentation. Ask for them. A constraint nobody has verified is worth less than one that runs in a build, and the machine-readable registry grades every claim on exactly that basis.
1.3 Things you do control
You own your brand, your storefront, your domain, and your marketing copy. You choose who you market to and where.
You choose your profit-split preset, above the platform floor. This is your only economic parameter. Leverage is set by the platform and adjusted by the risk engine; a leverage value supplied when your firm is provisioned is ignored.
You write and publish your own legal pages. DecentralProp supplies no template and does not review them. Section 4 covers what that means for you.
You earn a share of your firm's evaluation revenue, plus whatever your firm's token is worth.
2. Questions to put to your lawyer
These are the questions the arrangement above actually raises. We have views on none of them.
- Does a non-refundable evaluation fee count as a wager, a prize competition, or a lottery in this jurisdiction? The fee is not returned whether the trader passes or fails.
- Is advertising a simulated-trading evaluation a regulated financial promotion here? If so, does it matter that no real market position is ever opened?
- Which of these am I: a brokerage, an education provider, a contest operator, or a marketing affiliate of a platform? The answer probably turns on Section 1, which is why Section 1 is written the way it is.
- Does earning a revenue share from a platform make me an introducer, a tied agent, or an appointed representative of anyone?
- Do distance-selling, cooling-off, or advertising-standards rules apply to my storefront and my checkout?
- My firm has its own token, which I hold and which may appreciate. Does that require securities analysis, separately from the evaluation business?
- If a trader in another country buys from my storefront, whose rules apply, and what would I need to do to keep that from happening?
Question 7 is the one operators underestimate. Where your traders are is usually a bigger factor than where you are.
3. Where regulators have acted publicly
This section needs verification against current sources before publication. It was compiled from general knowledge of public reporting, not from primary legal research, and regulatory positions in this area have been moving quickly. Treat every entry as a lead to check, not a fact to rely on. Undated entries are undated because we could not confirm a date, which is itself a reason to check.
One framing rule governs this section, and it should govern anything you write on the subject too.
We publish a blocklist, never a whitelist. Naming the jurisdictions DecentralProp blocks at the platform level is a factual statement about our own system. Naming jurisdictions where operating is fine would be a legal opinion, and a wrong one would be the kind of statement that induced you to spend money. So this section tells you where regulators have visibly acted. It does not tell you anywhere that is safe.
Known areas of regulatory attention, each to be verified:
- United States. The Commodity Futures Trading Commission brought an action against a large retail prop firm in 2023. The claims were framed around fraud and misrepresentation rather than around operating without a licence, which is worth understanding: in this industry, enforcement has historically followed conduct, not registration status. Several firms stopped serving US customers afterwards.
- Platform infrastructure. MetaQuotes, the vendor behind MT4 and MT5, cut prop firms off its platforms in early 2024, forcing the industry onto other trading software. Not a regulator, but the single largest disruption the sector has had, and it was widely read as a response to regulatory pressure.
- European Union. Contracts for difference sold to retail customers are heavily restricted, including leverage caps and mandatory negative-balance protection. Whether an evaluation product falls inside that regime is exactly the question in 2.3.
- Italy, Czechia, Spain. Regulators in each have issued warnings about, or restricted access to, prop-firm websites. Specific authorities, dates, and scope need confirming.
- Australia, Canada. Both have active retail-derivatives regimes and have issued consumer warnings covering this sector. Scope needs confirming.
DecentralProp's own platform-level jurisdiction blocking is not yet decided. That decision is tracked as an open decision and the current state is: no blocking is enforced. When it is decided, the list of blocked jurisdictions will appear here, and it will be enforced technically rather than by a checkbox at signup.
4. What DecentralProp does not do for you
We do not give you legal advice, and nothing in this document or anywhere else on the platform is legal advice.
We do not provide a licence, a registration, or an authorisation that you can operate under. There is no umbrella here for you to shelter beneath.
We do not indemnify you against regulatory action, and the operator terms cap our liability to you.
We do not review your legal pages. The platform lets you publish a Terms of Service, a Privacy Policy, a Risk Disclosure, an AML Statement, and a KYC Policy on your storefront, and it does not check any of them against how the platform actually works. You could publish a description of a KYC process that DecentralProp does not run, and nothing would stop you. That is your exposure, and it is a real one.
We do not vet your marketing.
5. What you agree not to claim
The operator terms already forbid misrepresenting what your firm controls. Stated plainly, the things that get firms in this sector into trouble:
Do not claim you are licensed, regulated, or authorised unless you are, and can produce the registration.
Do not claim a compliance process the platform does not run. The clearest example is KYC. Wallet-only authentication means there is no identity verification on the platform today.
Do not guarantee payouts, describe an evaluation as low-risk, or imply a funding rate you cannot evidence.
Do not market into a jurisdiction DecentralProp blocks, once blocking exists.
Do not describe the platform's protections more strongly than they are. Some properties that will eventually be true are not true yet: the programs behind settlement and payouts can still be upgraded by a platform key, so no one can honestly say today that a payout is beyond DecentralProp's reach. The platform tracks which claims have become true and suppresses the rest from its own surfaces. Ask before you write copy that relies on one.
Do not repeat a claim from Section 1 in stronger words than Section 1 uses. The wording there is deliberate.
Cross-references: the protocol's own compliance register. the protocol's machine-readable registry of who controls what for the machine-readable claims, their enforcement points, and their verification status. the operator terms of service for the responsibility split between you and DecentralProp.