Definition
Non-custodial means you — not the platform, not the agent — hold the keys to your funds at all times. In a custodial model, you deposit funds with a third party who holds them on your behalf (like a brokerage or crypto exchange). In a non-custodial model, your funds never leave your control.
What non-custodial means for prediction market arbitrage
In the context of Arbitrage Agent:
- Your USDC stays in your Polymarket account (blockchain-native, on Polygon)
- Your USD stays in your Kalshi account (regulated US exchange)
- Arbitrage Agent connects via API credentials and places orders on your behalf
- Arbitrage Agent never receives, holds, or transfers your funds
- Revoking API access instantly stops all agent activity
Why non-custodial matters
Custodial risk is the risk that the custodian fails — goes bankrupt, gets hacked, or runs a fraud. History provides examples across crypto and fintech. Non-custodial architecture eliminates this risk category entirely: if Arbitrage Agent shuts down tomorrow, your funds are unaffected on Polymarket and Kalshi.
Custodial vs non-custodial trading platforms
Some arbitrage platforms require you to deposit funds into their system, which they then deploy. This is custodial. Arbitrage Agent is non-custodial — a fundamental architectural choice that protects your capital even in extreme scenarios (platform failure, legal action, security breach).
The API permission scope
API credentials for a non-custodial system should have the minimum necessary permissions: place orders, cancel orders, read balances. They should not have withdrawal permissions. Arbitrage Agent only requires order placement and cancellation permissions — it cannot withdraw your funds even if credentials were compromised.