> For the complete documentation index, see [llms.txt](https://docs.adcpcapital.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.adcpcapital.com/introduction/deterministic-capital.md).

# Deterministic Capital

ADCP's constitutional thesis: **human authority at the perimeter, deterministic authority at the core.**

Some economic rules become more credible when they are predetermined, transparent, difficult to alter unilaterally, and independently verifiable — the same lesson Bitcoin demonstrated for monetary rules. ADCP applies that principle to capital rules wherever they can be specified objectively in advance.

## The boundary

| Stays human / legal / regulated                                                                       | Moves to protocol-enforced code, where objectively specifiable |
| ----------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- |
| Identity, KYC/AML, suitability                                                                        | Capital eligibility and deployment limits                      |
| Licensing and client agreements                                                                       | Collateral thresholds and credit constraints                   |
| Legal title and enforceability                                                                        | Reserve and coverage rules                                     |
| Custody arrangements                                                                                  | Authority boundaries and state transitions                     |
| External valuation inputs (the oracle feed itself is external; how the protocol reacts to it is code) | Principal / revenue / loss / recovery classification           |
| Real-world enforcement                                                                                | Distribution formulas and supply invariants                    |
| Regulatory supervision and independent assurance                                                      | Observable execution and reconciliation state                  |

This is not "replace the regulated institution." It is: keep the institution accountable, while making its agreed economic rules harder to violate, reinterpret, or obscure after the fact.

## Trust language

* **Regulated perimeter. Verifiable core.**
* **Accountable institutions. Verifiable capital.**
* Do not ask people to trust what the system can prove.

ADCP does not eliminate audit. It turns more of the audit evidence into continuously verifiable state — see [Observable State](/verification/observable-state.md).

## Constitutional invariants

A small set of rules are locked at the constitutional layer and do not change for product-configuration convenience:

* Capital recovery reduces principal; it is never yield, interest, profit, or an equity distribution.
* Revenue is realized economic activity only — new deposits, issuance principal, and unrealized appreciation are never revenue.
* Distributable surplus only exists after senior obligations, liquidity reserves, and risk provisioning are satisfied.
* Solvency has priority over distributions, growth, or any commercial objective.
* Emergency authority can only make the system safer, never riskier — it cannot mint new residual supply, reorder seniority, erase liabilities, or seize assets.

See [Capital Accounting](/protocol/capital-accounting.md) and [PEU](/protocol/peu.md) for how these principles are implemented today.


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