When you use an automated trading service, there are two fundamentally different ways your funds can be handled. Understanding the difference is the single most important concept for anyone automating their trading.
Custodial: you deposit, they hold#
In a custodial model, you send your funds to the platform. The platform holds your money in its own accounts and trades on your behalf. You are trusting that platform to:
- keep your funds safe from hacks and insolvency,
- actually hold what it says it holds,
- and let you withdraw when you ask.
If the platform is compromised, mismanaged, or disappears, your funds are exposed — because they were in the platform's custody, not yours.
Non-custodial: your funds stay on your exchange#
In a non-custodial model, your funds never leave your own exchange account. You connect the trading service through an API key with trade-only permissions. The service can place orders on your account, but it can never move, withdraw, or hold your money.
This is how Liquid Edge works. Your capital sits in your own Bitunix or Hyperliquid account the entire time. Liquid Edge sends trade instructions to that account — nothing passes through a Liquid Edge wallet, because there isn't one.
Why it matters#
- Custody risk is removed. You are exposed to the market, not to a third party holding your money.
- You keep control. You can revoke the API key at any time and instantly sever access.
- If the service vanishes, your funds don't. They are already where they always were — in your exchange account.
How API-key trading differs from depositing#
Depositing hands over ownership; an API key hands over a limited permission. A trade-only key can read your balances and place orders, and that is the full extent of it. Withdrawal permission is never requested — and any tool that asks for it should be treated as a red flag.
For the practical details of what Liquid Edge's access can and cannot do, see the Security Model.