Islamic Finance Principles Assessment
Riba — Does Ellipsis [OLD] involve interest?
Ellipsis [OLD]'s core protocol does not rely on interest-based lending or borrowing; it generates income from stablecoin swap fees on an AMM. This fee-based, activity-linked revenue model is structurally distinct from riba. For Muslim investors, the base design does not raise direct interest concerns, though the dormant legacy status of this specific token warrants separate caution.
Assessment: Minor Riba
Score: 70.5/100
Our methodology examines 10 criteria to evaluate how well Ellipsis [OLD] avoids interest-based mechanisms.
Ellipsis Finance's revenue derives exclusively from trading fees (0.04%-0.4%) charged on stablecoin and pegged-asset swaps, split 50/50 between liquidity providers and lockers/stakers via a FeeConverter contract. No lending, borrowing, or interest-bearing product is offered at the base protocol level. No treasury composition or interest-bearing reserve holdings are disclosed in available sources. This fee-for-service model, tied to actual swap volume rather than a guaranteed return on capital, is consistent with permissible profit-sharing rather than riba-based income generation.
Rewards flow through two contracts: LpTokenStaker (MasterChef-style) distributes EPS to liquidity providers, who can then stake into EpsStaker for a share of protocol fees. Returns are variable, driven by real trading volume, not a fixed guaranteed rate — an important distinction from riba. An optional three-month lock offers boosted rewards, with a 50% early-exit penalty redistributed to those who honored the lock. This forfeiture-based mechanic is fee-sourced and performance-linked rather than interest-bearing, though the penalty structure itself deserves investor awareness before committing funds.
Gharar — How much uncertainty does Ellipsis [OLD] involve?
Ellipsis [OLD] carries moderate uncertainty, stemming mainly from anonymous founders, sparse recent disclosure, and its status as a superseded legacy token. Open-source code and a documented 2021 audit reduce ambiguity around contract mechanics, but the lack of named leadership and dormant market activity increase overall opacity. On balance, gharar here is elevated enough to warrant caution before any fresh capital allocation to the [OLD] token specifically.
Assessment: Moderate Gharar (Material Uncertainty)
Score: 58/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
No founding team is named or credentialed in available sources for the Ellipsis Finance / EPS project itself (distinct from unrelated same-named entities like Ellipsis Labs or ellipsis.dev, which have been correctly excluded here). The smart contracts are open-source on GitHub, allowing independent verification of mechanics such as fee-splitting and staking logic. Governance operates through token-locking for incentive votes, but details on admin-key control or decentralization safeguards are limited, leaving a meaningful transparency gap around who ultimately controls protocol parameters.
A smart-contract audit was performed by Hacken OÜ between March 30 and April 1, 2021, covering reentrancy, access control, and token-supply manipulation risks, with the report publicly available on the project's GitHub. No later or additional audits appear in the sources, meaning security review coverage has not kept pace with any subsequent protocol changes. Given the token's current "[OLD]" and largely dormant status, users should treat undisclosed post-2021 risk factors and the absence of updated audits as an active gharar concern rather than a resolved matter.
Maysir — Does Ellipsis [OLD] involve gambling or speculation?
Ellipsis [OLD] is not designed as a gambling instrument; it functions as a stablecoin exchange facilitating low-slippage swaps between pegged assets. Genuine utility and fee-based economics distinguish it from pure speculative or chance-based products. That said, thin secondary-market liquidity in the legacy token invites price volatility that resembles speculative trading rather than the protocol's intended use.
Assessment: Moderate Maysir (High Risk)
Score: 60.5/100
Our methodology examines 11 criteria to determine whether Ellipsis [OLD] is a gambling instrument or a genuine economic tool.
The protocol provides a concrete, productive service: enabling users to swap between stablecoins and pegged assets (such as BUSD, USDC, USDT) with minimal slippage via a Curve-style StableSwap AMM. Liquidity providers earn fees for supplying real capital that facilitates this exchange function, and stakers who lock tokens support protocol stability in exchange for a share of genuine trading-fee revenue. This fee-for-service structure, grounded in actual swap activity rather than chance or zero-sum wagering, aligns with a productive economic use case rather than gambling.
Against this genuine utility must be weighed the current market reality: the legacy EPS "[OLD]" token trades at extremely low volumes (reported as low as $22-$480 per 24 hours), reflecting near-dormant secondary-market interest following migration to EPX. Such thin liquidity can amplify speculative price swings disconnected from underlying protocol usage. While the protocol's design itself is not maysir, prospective buyers of the [OLD] token specifically should recognize that trading it now carries more resemblance to speculative positioning on an abandoned asset than to participation in an active fee-generating exchange.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 25/100 | No named or credentialed team could be identified for the Ellipsis Finance (EPS) project itself; individuals found under the "Ellipsis" name belong to unrelated companies, so anonymity is inferred by absence rather than stated directly. |
| Fraud & Scam Risk | 60/100 | No fraud, hack, or rug-pull reports specific to this project appear in the sources, and an audit and public GitHub exist, but the absence of negative reports is not the same as a confirmed clean record. |
| Use Case Legitimacy | 75/100 | The protocol is a live, functioning stablecoin-swap DEX with a documented real use case, not a hype-only asset. |
| Ethical Practices | 85/100 | Sources describe the protocol's own design as facilitating stablecoin swaps with no inherent interest or gambling mechanics. |
Summary: The Ellipsis Finance (EPS) team is not named in these sources, though the protocol is a genuine, audited, open-source stablecoin DEX rather than a meme project.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 85/100 | The base protocol operates a decentralized exchange for pegged/stablecoin assets, a sector with no inherent Shariah prohibition. |
| Transaction Fees | 80/100 | Trading fees are split between liquidity providers and token lockers as a revenue-share, not retained as an interest-like extraction or hidden charge. |
| Treasury Assets | 50/100 (low evidence) | The sources give no detail on treasury composition, so whether treasury holdings include interest-bearing instruments cannot be established. |
| Revenue Model | 80/100 | Protocol revenue is explicitly stated to come from trading fees rather than interest-based lending activity. |
| Transparency | 80/100 | Smart contracts and audit reports are published openly on GitHub, and documentation is publicly available. |
| Governance | 55/100 | Token-locking enables voting on pool incentives, but the sources give no detail on broader decentralization or admin-key controls. |
| Launch Fairness | 45/100 | A partner allocation of 25% of supply to Curve's veCRV holders over a year suggests an insider/partner-favoring launch structure rather than a fully organic public launch. |
| Token Distribution | 50/100 | LP reward emission schedules are disclosed, but team/investor allocations are not specified in the sources, limiting a full distribution assessment. |
| Speculation/Utility Ratio | 45/100 | The base protocol has genuine swap utility, but the "[OLD]" EPS token now shows very low trading activity, suggesting it is largely a legacy/speculative remnant rather than an actively-utilized token. |
Summary: The protocol runs a Curve-forked stableswap DEX on BNB Chain with fee revenue split between liquidity providers and stakers, open-source code, but limited disclosure on treasury and full token-distribution details.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 80/100 | Revenue is fee-based from swap activity, with no lending or interest income described. |
| Financial Status | 30/100 | Reported trading volumes for the legacy EPS token are extremely low, indicating the token is now largely dormant following migration to EPX. |
| Interest Assessment | 85/100 | The protocol is explicitly described as a swap/AMM with no lending or borrowing function at the base-protocol level. |
| Audit Quality | 65/100 | A named firm, Hacken OÜ, conducted a smart-contract audit in March–April 2021, with the report published on the project's own GitHub, though later or repeat audits are not evidenced. |
Summary: Revenue is purely fee-based with no lending/interest function at the protocol level, one named audit firm (Hacken) is documented, and the legacy EPS token itself now shows very low market activity.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 75/100 | The token carries defined utility functions (fee-sharing, governance voting, reward boosting) rather than being purely speculative. |
| Governance Rights | 65/100 | Locked tokens can vote on pool incentives, giving holders a defined governance function, albeit limited in scope. |
| Rewards Distribution | 75/100 | Rewards derive from variable trading-fee income and penalty redistribution rather than a fixed, guaranteed rate. |
| Speculation Controls | 65/100 | A lock-based system with an early-exit penalty redistributed to long-term stakers functions as an explicit anti-speculation design feature. |
| Asset Backing | 55/100 | The token's value is tied to protocol fee revenue and utility rather than any described reserve of tangible or halal backing assets. |
Summary: EPS/EPX functions as a utility and governance-voting token with variable, fee-derived rewards and a lock/penalty structure aimed at reducing short-term speculation.
5. Staking Mechanism (5 criteria)
| Criterion | Score | Analysis |
|---|
| Mechanism Type | 75/100 | Staking is executed via non-custodial smart contracts (EpsStaker/LpTokenStaker) with optional locking, as documented in the project's own code. |
| Islamic Contract Classification | 45/100 | The fee-sharing model resembles a profit-distribution arrangement, but the 50% forfeiture penalty on early exit redistributed to remaining lockers is not clearly classified under a standard Islamic contract and leaves an unresolved structural question. |
| Rewards Structure | 70/100 | Reward levels vary with actual trading-fee income and penalty inflows rather than being fixed or guaranteed. |
| Documentation | 75/100 | Staking mechanics, lock terms, and penalty structure are documented in the project's public docs and GitHub. |
| Shariah Alignment | 45/100 | The exit-penalty redistribution mechanism introduces an unresolved question about its Islamic characterization, even though the overall fee-sharing model is comparatively low-gharar. |
Summary: A native, non-custodial staking mechanism exists with optional locking, variable fee-based rewards, and a penalty-redistribution design, though its precise Islamic contract classification remains unresolved.
Overall Assessment: Ellipsis [OLD] (EPS) is a real-utility stablecoin-swap protocol with fee-based, non-interest revenue and documented open-source code and audit, but anonymous team disclosure, incomplete treasury/distribution data, and an unresolved staking-penalty structure leave several compliance questions only partially answered.
![Ellipsis [OLD] logo](https://coin-images.coingecko.com/coins/images/14498/large/ellipsis-light.png?1696514184)
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar