How Do Prop Firms Make Money? Challenge Fees and Profit Splits
Last Updated: November 4, 2026
Prop firms make money mostly from evaluation fees: traders pay for a challenge, most attempts breach a loss limit and the fee stays with the firm, while resets, add-ons and a 10 to 20% share of funded profit come on top. EVEDEX Funded Trading charges no challenge fee and takes no profit share; it earns only trading fees.
This guide breaks down where the revenue of crypto prop firms and other challenge-model firms comes from, what that means for you as a trader, how the models compare and how a funded account on EVEDEX works without a challenge fee.
Key takeaways
- EVEDEX, a multi asset trading platform, earns from trading fees only on Funded Trading: no challenge fee, no profit share, and the trader keeps 100% of profit.
- Evaluation fees are the main revenue source for most retail prop firms.
- Failed attempts and paid resets keep the fee with the firm, and most attempts fail.
- Profit splits are typically 80 to 90% for the trader, so the firm's share of funded profit is the smaller part of its income.
- Payout rules, drawdown limits and account-closure reasons matter as much as the advertised split.
How do prop firms make money?
- Evaluation fees. Every challenge is paid for up front, as a one-time or monthly fee, whether the trader passes or not.
- Resets and retries. Breaching a daily or overall loss limit ends the attempt, and a new attempt is sold again.
- Profit share. Traders who pass and get paid keep most of the profit; the firm keeps the rest.
- Add-ons. Faster payouts, higher splits or extra rules can be sold as paid options.
Retail firms pay no salary either: the income of a prop trader is the split alone, so in a month without profit the firm pays nothing.
Where the challenge fee goes
Loss limits and profit targets are tight by design, so most attempts end before a funded account is reached. On many retail platforms the funded account itself is simulated: the firm does not place the trades in the market but pays out a share of the simulated profit. Fee revenue from the many failed attempts covers the payouts to the few traders who pass, which is why the model can work for the firm even when individual traders win.
Is a prop firm a hedge fund, then? No: a firm built on proprietary trading raises no money from investors, so its income comes from traders' fees rather than from management and performance fees.
What this means for traders
- Count the cost per attempt. A cheap challenge bought three times is not cheap.
- Read the payout policy. Prop firm payouts depend on minimum trading days, consistency rules and caps on the first payout.
- Check closure reasons. Rules on news trading, weekend holding or copy trading can end an account that is in profit.
- Compare with the alternatives. Futures and crypto prop firms use the same model on different markets, while own-margin programmes remove the evaluation entirely.
Revenue models compared
| Model | Main revenue | What the trader pays | Share of the trader's profit |
|---|---|---|---|
| EVEDEX Funded Trading | Trading fees | Fees per trade, at most 0.015% maker and 0.045% taker before cashback | 0%: the trader keeps 100% |
| Challenge-model prop firm | Evaluation fees, resets and add-ons | A fee for every attempt | Typically 10 to 20% |
The difference is where the risk sits. In a challenge you risk the fee on every attempt; with own-margin funded trading you risk the margin you post, and nothing is kept from your profit.
Prop trading without a challenge fee on EVEDEX
EVEDEX Funded Trading has no evaluation and no profit target; EVEDEX earns from the trading fees on that activity, the same way it earns on regular accounts.
- Revenue model: trading fees only; no challenge fee and no share of your profit.
- Fees: no more than 0.015% maker and 0.045% taker before cashback.
- Margin tiers: six tiers, from 50 USDT for a 1,500 USDT notional to 3,335 USDT for 100,000 USDT; you keep 100% of the profit.
- Maximum loss: the margin you posted, which can be lost in full.
- Markets: the same 52 perpetual markets as regular accounts, according to EVEDEX data as of November 4, 2026: crypto, gold, oil, US stocks and forex on one USDT balance.
- KYC: no classic KYC; every deposit passes an automated AML check.
- Access: web app only; not available in restricted countries.
Perpetual contracts carry a high risk of loss.
