// GLOSSARY

Non-custodial

An arrangement where a service never takes control of your funds or keys. Polymarket settlement is non-custodial (positions live in your wallet); services that hold encrypted venue keys and act only on your instruction occupy a middle ground worth understanding.

"Non-custodial" means the service can't unilaterally move your assets. It's a spectrum, not a binary, and prediction-market infrastructure sits at several points on it.

The spectrum

• Fully custodial: an exchange account. Kalshi holds your cash balance as a regulated exchange; you trust the institution and its regulation.
• Non-custodial settlement: Polymarket positions are ERC-1155 tokens in your own wallet; matched trades settle onchain against orders only you could have signed via EIP-712.
• Key custody middle ground: a routing service like Mithril stores your venue API keys encrypted (envelope encryption, X25519) and uses them only to execute orders you or your agent request, within limits you set. It's not "non-custodial" in the pure wallet sense — precision matters here — but the keys remain yours and the design goal is minimal trust.

Why it matters

Every automation decision is a custody decision: whoever can sign can trade. Map the options before wiring an agent to real money — agent custody for prediction markets walks the trade-offs.