Contributor: School of Crypto
Most people think there’s a small number of avenues for a trader. Trade the markets on your own or as a quant for a firm. But there is another option in the fold. Trade for a prop firm.
A prop firm, or a proprietary firm, is a business that provides capital to top traders for a fee, and takes a small cut of profits in return. In other words, if you are someone that has an edge in predicting market movements but are strapped for cash, a prop firm could be a very lucrative and ideal option to go with.
Proprietary Trading Network (PTN) is building the world’s most trustless, transparent, and profitable prop firm in the world, built on Bittensor. They focus on futures-based positions on markets such as cryptocurrencies, Forex, Indices/Equities, and Metals.
Let’s take a look at what problems they’re solving and how they differentiate from traditional prop firms.
The problem
The retail prop firm industry generates between $500 million and $1 billion in annual revenue, primarily from registration fees paid by hundreds of thousands of aspiring traders.
Leading players like FTMO and FundingPips dominate this space but exemplify its flaws. Most prop firms in existence don’t necessarily have pure external capital to fund traders. All of these stacks come from the initial fees charged to the traders in the beginning.
Participants usually need to go through a rigorous challenge to prove their trading effectiveness before they can even receive funds to trade with.
In turn, there are only a small % of traders that pass the initial tests who receive the capital to even trade. Based on this business model, prop firms are incentivized for the traders to lose and make pure profit based on the fees alone.
When traders do win big and prop firms run low on their pool of fees collected, they can’t fund accounts to scale, usually go illiquid, and close up shop.
Beyond the issues already mentioned, these firms often engage in manipulative tactics such as stop-loss hunting (deliberately triggering traders’ stop-loss orders), providing poor spreads, and outright market manipulation to ensure losses.
Many don’t even have functional withdrawal buttons, and when traders do succeed, firms become illiquid and unable to pay out, leading to sudden closures.
Prop firms usually conduct very predatory practices in keeping funding modest and design rules to favor failures. Overall, these practices don’t have the trader’s best interests in mind.
PTN solution
PTN takes a 180-degree approach to the typical prop firm business model. Subnet #8 is built as a decentralized open-source platform with on-chain trackable payouts. PTN provides total transparency and eliminates the common shady practices through verifiable rules and fair play.
As opposed to relying on initial fees to fund traders, PTN came up with an ingenious way to provide more liquidity to accounts. They identify the best traders on the platform and copy trade them through their automated trading platform, Glitch Financial.
PTN employs machine learning models integrated with external data sources. This capital-efficient approach generates more collective profit than individual traders, enhancing liquidity and scalability for the entire network. Their strategy is already performing at the 75th percentile of hedge funds with large capital.
Traders can start trading with a $100,000 account and can reach upwards of $2.5 million, which far exceeds typical limits. Unlike traditional firms that take 10% or more of traders’ profits, PTN lets traders keep 100% of their earnings, with no percentage cut. Instead, PTN focuses on sustainable, decentralized incentives.
Miners on PTN can purchase additional Assets Under Management (AUM) using PTN’s alpha tokens, scaling their accounts beyond the initial $100,000 up to $2.5 million (far surpassing the $200,000–$400,000 limits of competitors).
This tokenizes trading capacity, making it accessible for quants seeking serious leverage without predatory barriers.
Build your own Prop firm
Not only can traders benefit from PTN’s innovative and fair prop firm model, but they can also build a prop firm of their own. Miners have the option of using PTN as a back-end infrastructure.
Essentially, miners can have liquidity, trade execution, and on-chain transparency handled by PTN, while they can spin up their own niche prop firms. Participants can spin up their own rules, fees, and marketing, and create their own business operation.
Now, instead of miners having to rely on making trades in order to be profitable, they can make revenue by collecting their own fees and cuts from other traders’ profits.
PTN will offer DEXs the ability to prop funding as a mechanism into their own platform. In fact, PTN is already in discussions with multiple DEXs to incorporate their services onto their own platforms. Traders can get bigger stacks to trade with while the exchanges can collect the fees.
This service democratizes the space, turning PTN into a central hub where anyone, from DEXs to individual entrepreneurs, can integrate prop funding, collect fees, and expand trading opportunities.
How to join as a PTN miner
There are a number of steps in order to successfully become a minor on Proprietary Trading Network. First, you need to pay a registration fee of 2.5 TAO.
Miners must deposit a minimum of 300 alpha tokens to compete, scaling up to 5,000 for maximum AUM.
Then there is a 60 to 90 day challenge in which the minor needs to outperform current miners in the network in their respective trading arena.
Miners are now compensated solely based on actual profits from the previous month, with any unallocated emissions recycled or burned. This ensures the network remains solvent and aligned with real performance.
If a miner experiences excessive drawdown or elimination, the network collects and burns a portion of their deposited alpha, creating deflationary pressure and incentivizing strong performance.
Alphanomics
PTN is securing over-the-counter (OTC) deals to exchange ownership alpha tokens for fiat capital, locked up for multiple years. This influx allows copy trading of top miners via Glitch Financial, achieving break-even on emission flows while creating a realistic trading environment that mirrors market conditions.
PTN will continue to provide improvements to their network models. With greater capital efficiency being built, it will allow the subnet to buy back more alpha than they emit.
Between the alpha token collateral being locked up for years, burning a portion of miner emissions, and buying back more PTN tokens, the team expects sustainable positive inflows to the subnet.
Future of PTN
The founder of PTN, Arrash, perfectly summarized what to expect in the future for the next-gen prop firm.
“Financial market trading is just the first market. Prop funding for sports betting. Prop funding for predictions. More users seeking funding, more net inflows for the first decentralized prop firm”.
Not only can PTN be the prop firm hub for futures-type markets, but it can expand to newly popular Polymarket-like betting spanning sports, politics, weather predictions, and much more.
PTN paving a new path forward
Traditional prop firms seemed to be one big fake facade. It was acting like a place for traders without resources to get big accounts for little buy-in. In reality, the odds were stacked against these people, and the prop firms were just looking to collect their fees.
On PTN, miners are encouraged to win big. They are provided with ever-flowing liquidity with the peace of mind, having transparency and accountability on the decentralized Bittensor platform.
Arrash and the PTN team have big goals. Making prop firm trading more equitable, fair, and profitable for traders is a key tenet of the operation.
PTN is yet another subnet that’s going to shake up its centralized competitors and change things for the better.
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