diff --git a/packages/server/src/db/seed-removal.test.ts b/packages/server/src/db/seed-removal.test.ts
new file mode 100644
index 00000000..9f6baecb
--- /dev/null
+++ b/packages/server/src/db/seed-removal.test.ts
@@ -0,0 +1,50 @@
+import { describe, it, expect, beforeEach } from 'vitest';
+import Database from 'better-sqlite3';
+import fs from 'node:fs';
+import path from 'node:path';
+import { fileURLToPath } from 'node:url';
+import { ensureDefaults } from './migrate.js';
+
+const __dirname = path.dirname(fileURLToPath(import.meta.url));
+
+function applyMigrations(db: Database.Database): void {
+  const migrationsDir = path.resolve(__dirname, '../../drizzle');
+  const files = fs.readdirSync(migrationsDir).filter(f => f.endsWith('.sql')).sort();
+  for (const f of files) {
+    const sqlText = fs.readFileSync(path.join(migrationsDir, f), 'utf8');
+    for (const stmt of sqlText.split(/-->\s*statement-breakpoint/)) {
+      const clean = stmt.trim();
+      if (clean) db.exec(clean);
+    }
+  }
+}
+
+describe('fresh instance has no seeded credentials', () => {
+  let sqlite: Database.Database;
+
+  beforeEach(() => {
+    sqlite = new Database(':memory:');
+    sqlite.pragma('foreign_keys = ON');
+    applyMigrations(sqlite);
+    ensureDefaults(sqlite);
+  });
+
+  it('creates no admin user and no default space on fresh boot', () => {
+    const users = sqlite.prepare('SELECT COUNT(*) AS n FROM users').get() as { n: number };
+    const spaces = sqlite.prepare('SELECT COUNT(*) AS n FROM spaces').get() as { n: number };
+    expect(users.n).toBe(0);
+    expect(spaces.n).toBe(0);
+  });
+
+  it('has no user named "admin"', () => {
+    const admin = sqlite.prepare("SELECT id FROM users WHERE username = 'admin'").get();
+    expect(admin).toBeUndefined();
+  });
+
+  it('still creates the singleton instance_settings row', () => {
+    const row = sqlite.prepare('SELECT id, worker_id FROM instance_settings WHERE id = 1').get() as
+      { id: number; worker_id: number | null } | undefined;
+    expect(row?.id).toBe(1);
+    expect(row?.worker_id).not.toBeNull();
+  });
+});
diff --git a/packages/server/src/db/seed.ts b/packages/server/src/db/seed.ts
deleted file mode 100644
index 5b36882d..00000000
--- a/packages/server/src/db/seed.ts
+++ /dev/null
@@ -1,81 +0,0 @@
-import { getDb, schema } from './index.js';
-import { generateSnowflake } from '../utils/snowflake.js';
-import { hashPassword } from '../utils/auth.js';
-import { eq } from 'drizzle-orm';
-import { DEFAULT_EVERYONE_PERMISSIONS, permissionsToString } from '@backspace/shared/src/permissions.js';
-
-export async function seedDatabase(): Promise<void> {
-  const db = getDb();
-
-  const existingSpaces = db.select().from(schema.spaces).all();
-  if (existingSpaces.length > 0) {
-    console.log('Database already has data, skipping seed');
-    return;
-  }
-
-  console.log('Seeding database with default data...');
-
-  const adminId = generateSnowflake();
-  const adminPasswordHash = await hashPassword('admin123');
-
-  db.insert(schema.users).values({
-    id: adminId,
-    username: 'admin',
-    displayName: 'Admin',
-    passwordHash: adminPasswordHash,
-    status: 'offline',
-    isAdmin: 1,
-    createdAt: Date.now(),
-  }).run();
-
-  const spaceId = generateSnowflake();
-  db.insert(schema.spaces).values({
-    id: spaceId,
-    name: 'Backspace',
-    ownerId: adminId,
-    inviteCode: 'backspace',
-    createdAt: Date.now(),
-  }).run();
-
-  db.insert(schema.spaceMembers).values({
-    spaceId: spaceId,
-    userId: adminId,
-    joinedAt: Date.now(),
-  }).run();
-
-  const generalChannelId = generateSnowflake();
-  db.insert(schema.channels).values({
-    id: generalChannelId,
-    spaceId: spaceId,
-    name: 'general',
-    type: 'text',
-    topic: 'General discussion',
-    position: 0,
-    createdAt: Date.now(),
-  }).run();
-
-  const voiceChannelId = generateSnowflake();
-  db.insert(schema.channels).values({
-    id: voiceChannelId,
-    spaceId: spaceId,
-    name: 'General Voice',
-    type: 'voice',
-    position: 1,
-    createdAt: Date.now(),
-  }).run();
-
-  // Create @everyone role (id === spaceId convention)
-  db.insert(schema.roles).values({
-    id: spaceId,
-    spaceId: spaceId,
-    name: '@everyone',
-    color: '#b9bbbe',
-    position: 0,
-    permissions: permissionsToString(DEFAULT_EVERYONE_PERMISSIONS),
-    createdAt: Date.now(),
-  }).run();
-
-  console.log('Database seeded successfully');
-  console.log(`  Default space: Backspace (invite code: backspace)`);
-  console.log(`  Admin user: admin / admin123`);
-}
diff --git a/packages/server/src/index.ts b/packages/server/src/index.ts
index d2179129..b138694f 100644
--- a/packages/server/src/index.ts
+++ b/packages/server/src/index.ts
@@ -5,7 +5,6 @@ import websocket from '@fastify/websocket';
 import fastifyStatic from '@fastify/static';
 import { config } from './config.js';
 import { getDb, getRawDb } from './db/index.js';
-import { seedDatabase } from './db/seed.js';
 import { checkFfmpeg } from './utils/thumbnail.js';
 import { authRoutes } from './routes/auth.js';
 import { userRoutes } from './routes/users.js';
@@ -108,7 +107,6 @@ async function main(): Promise<void> {
 
   // Initialize database
   getDb();
-  await seedDatabase();
 
   // Reset orphaned `users.status` rows for locally-homed users. The previous
   // process's in-memory disconnect timers are gone, so any non-offline row
diff --git a/packages/server/src/routes/auth.test.ts b/packages/server/src/routes/auth.test.ts
index c51f17a0..547dd2b7 100644
--- a/packages/server/src/routes/auth.test.ts
+++ b/packages/server/src/routes/auth.test.ts
@@ -488,3 +488,60 @@ describe('POST /api/auth/register — federation gate split', () => {
     expect(reds).toHaveLength(0);
   });
 });
+
+describe('POST /api/auth/register — first-user-admin promotion', () => {
+  beforeEach(() => {
+    // Start from a completely empty users table (no pre-seeded admin from outer beforeEach).
+    testDb.delete(schema.users).run();
+    // Ensure instance_settings row so registration can proceed.
+    testDb.delete(schema.instanceSettings).run();
+    testDb.insert(schema.instanceSettings).values({
+      id: 1,
+      registrationOpen: 1,
+      federatedRegistrationOpen: 1,
+      updatedAt: Date.now(),
+    }).run();
+  });
+
+  it('first locally-registered user receives isAdmin = 1', async () => {
+    const res = await app.inject({
+      method: 'POST',
+      url: '/api/auth/register',
+      payload: { username: 'firstuser', password: 'password123' },
+    });
+    expect(res.statusCode).toBe(201);
+
+    const user = testDb.select().from(schema.users).where(eq(schema.users.username, 'firstuser')).get();
+    expect(user?.isAdmin).toBe(1);
+  });
+
+  it('second locally-registered user does NOT receive isAdmin', async () => {
+    await app.inject({
+      method: 'POST',
+      url: '/api/auth/register',
+      payload: { username: 'firstuser', password: 'password123' },
+    });
+    const res = await app.inject({
+      method: 'POST',
+      url: '/api/auth/register',
+      payload: { username: 'seconduser', password: 'password123' },
+    });
+    expect(res.statusCode).toBe(201);
+
+    const second = testDb.select().from(schema.users).where(eq(schema.users.username, 'seconduser')).get();
+    expect(second?.isAdmin).toBe(0);
+  });
+
+  it('federated user (homeInstance set) is never promoted to admin even if first in DB', async () => {
+    const res = await app.inject({
+      method: 'POST',
+      url: '/api/auth/register',
+      payload: { username: 'feduser@remote.example', password: 'password123', homeInstance: 'remote.example' },
+    });
+    // Federated registration is open (federatedRegistrationOpen: 1)
+    expect(res.statusCode).toBe(201);
+
+    const user = testDb.select().from(schema.users).where(eq(schema.users.username, 'feduser@remote.example')).get();
+    expect(user?.isAdmin).toBe(0);
+  });
+});