Operator risk & lifecycle

You don't manage risk. The ARE does.

Every firm runs the same Autonomous Risk Engine (see The risk engine), and it isn't a dial you turn. You don't set your firm's risk tierRisk tierA firm's current health classification under the ARE: Trusted, Standard, Strained, or Critical. Only ever tightens what new evaluations and payouts look like going forward, never retroactively., tighten your own payout caps, or configure your own leverage limits under stress, the engine reads your firm's real financial signals and adjusts automatically. What you control is upstream of that: how you price, market, and run your storefront. What happens to a stressed firm downstream of that is not something an operator configures, deliberately, so that no operator can quietly loosen risk controls to chase short-term revenue.

In practice, this means: if your firm's tier drops, evaluations purchased from that point get modestly harder, payouts slow down, and available leverage drops, automatically, without you doing anything, and without affecting accounts your firm already funded. Your job during a stressed stretch is the same as during a healthy one: keep selling. New sales are what refill a stressed treasury, and the protocol never stops you from doing that, even at the most stressed tier.

The security bond is a deterrent, not a fund you manage

Every firm posts a 50 SOL bond in the on-chain dispute program, self-funded automatically from a slice of your own fee revenue (see Operator economics). You never interact with it directly unless something goes wrong. If a settlement from your firm is ever proven fraudulent, the bond is seized entirely, split between whoever caught it and the protocol. Operating honestly, this bond is simply capital sitting behind your firm that you'll never think about again.

There is no voluntary exit

This is the single most important thing to understand before launching: a solvent firm cannot be shut down by its operator. There's no instruction that lets you wind down and withdraw your treasury on your own initiative. A firm that's doing well is meant to keep running indefinitely, that's the design, not an oversight or a missing feature.

The only path to a firm closing is automatic bankruptcy, and it's triggered by one specific condition: your firm's cumulative draws on the shared Universal Treasury PoolUniversal Treasury PoolA cross-firm shared liquidity pool, funded by a slice of every firm's fees, used only as the last layer of the payout waterfall. reaching 10% of that pool's balance. Crossing that line isn't a judgment call or a manual decision, it happens automatically, in the same transaction as the draw that crosses it.

If it happens:

1. Your firm immediately stops selling new evaluations. This is the only situation in which a firm's sales ever pause.
2. Every trader you currently owe gets paid in full first. Bankruptcy doesn't discharge existing obligations, it exists specifically to make sure they're honored.
3. What's left sweeps to the commons, not to you. 100% of your remaining treasury and insurance fund residual return to the Universal Treasury Pool. Any unvested portion of your owner drip is clawed back the same way. You keep whatever already vested; you receive nothing further.

The logic is symmetric with how the protocol treats traders: the same rule that stops a firm from shortchanging a trader also stops an operator from walking away from an obligation to the shared commons.

What actually keeps a firm out of that situation

Reaching 10% of the shared pool takes sustained, serious drawdown, it isn't something a single bad week triggers. Tiers 1 through 3 of the payout waterfall (your own treasury, your token reserve, backstop stakingBackstop stakingCapital voluntarily staked by outside investors as a firm's payout collateral, in exchange for yield. Drawn on only after a firm's own treasury and token reserve are exhausted.) are your firm spending its own money, and none of that counts toward the bankruptcy threshold. Only draws on the shared Tier-4 pool do. In practice, a firm that prices sustainably, doesn't oversell account sizes its liquidity can't support, and keeps its own treasury and backstop healthy essentially never gets near that line. This is also why the account-size ladder (see Evaluations & the rulebook) exists: it's a structural guardrail that keeps a firm from selling exposure larger than what it can actually cover.