Scope & Non-Banking Clarification
Protocol Boundaries and Legal Posture
Purpose
This section defines the scope of the Sagitta Protocol and clarifies its non-banking posture.
It exists to distinguish protocol-level capital mechanics from regulated financial activities performed by traditional institutions, while preserving the integrity and authority of the protocol’s design.
This clarification governs interpretation of all subsequent chapters.
Protocol Scope
Sagitta is a protocol-defined financial system, not a banking institution, trust company, or custodial service provider.
All capital interactions described in this document occur at the protocol level, governed by deterministic rules, smart-contract logic, and system invariants. No legal entity exercises discretionary control over participant capital.
Sagitta defines:
how capital is recorded,
how it may be allocated,
how outcomes are settled, and
how protection and continuity are enforced,
through protocol law, not corporate discretion.
Non-Banking Posture
The Sagitta Protocol does not engage in banking, trust, or deposit-taking business.
Specifically:
The protocol does not accept deposits as banking liabilities
The protocol does not operate deposit accounts
The protocol does not offer on-demand withdrawal promises characteristic of banking
No legal entity guarantees repayment as a balance-sheet obligation
References in this document to “deposits,” “depositors,” or similar terms describe protocol-level capital contributions governed by system accounting and invariants, not deposits held by or owed from a regulated financial institution.
Capital Contributions and Protocol Accounting
Capital contributed to Sagitta is governed by:
protocol-defined custody and accounting logic,
rule-based allocation and settlement,
reserve-backed protection mechanisms, and
continuity governance.
Capital protection arises from structural design, including reserves, loss-absorption ordering, and deterministic settlement, rather than from corporate guarantees or discretionary promises.
Insurance and Protection Clarification
Any reference to “insurance” within Sagitta describes protocol-level reserve mechanisms that absorb losses and preserve principal according to predefined rules.
Such mechanisms:
are capitalized within the protocol,
operate automatically under protocol law, and
do not constitute insurance contracts issued by an insurer or guaranteed by a legal entity.
Protection is enforced mechanically, not contractually.
Governance and Authority Boundary
Governance within Sagitta:
defines parameters,
approves doctrine, and
oversees upgrades,
but does not exercise discretionary custody or banking authority.
Protocol behavior remains constrained by system invariants regardless of governance composition or outcomes.
Interpretation Guidance
This whitepaper describes how the Sagitta Protocol functions, not how any specific legal entity conducts regulated financial business.
Where legal entities interact with the protocol (e.g., development, governance facilitation, or infrastructure support), such activities are separate from and subordinate to protocol-level operation.
Closing Statement
Sagitta is designed as financial infrastructure governed by protocol law, not as a bank, trust, or custodial institution.
Capital safety, discipline, and continuity emerge from structure, reserves, and enforcement, not from reliance on corporate promises or regulatory classification.
This clarification preserves both:
the sovereignty of the protocol, and
the integrity of applicable legal boundaries.
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