Islamic Finance Principles Assessment
Riba — Does Fluid involve interest?
Fluid's foundational business is lending and borrowing at variable but explicitly interest-denominated rates, meaning riba is embedded in the protocol's core mechanics rather than being an optional or peripheral feature. Some fee flows (performance fees, exit fees, swap-fee cuts) are permissible-style service charges, but they sit atop an interest-bearing base layer. For Muslim investors, this base design is the decisive factor and warrants real caution.
Assessment: Riba Dominant
Score: 33.5/100
Our methodology examines 10 criteria to evaluate how well Fluid avoids interest-based mechanisms.
Fluid's treasury revenue is drawn primarily from borrower interest on its Lending/Vault protocol, supplemented by Fluid Lite's 20% performance fee and 0.05% exit fee, and a governance-adjustable DEX swap-fee cut (currently 0%, capped at 25%). The performance and exit fees resemble permissible service charges tied to fund management, but the dominant revenue stream — interest paid by borrowers to depositors and partly retained by treasury — is textbook riba. Because this interest flow is structural to the protocol's design, not incidental, the treasury itself is substantially interest-funded.
No live, documented native FLUID staking mechanism could be confirmed; sources describe only a "possible" future staking feature contingent on governance activation. What does exist is a revenue-triggered buyback (activated once annual revenue hits $10M), funded by protocol income including borrower interest, with governance deciding whether tokens are burned or redistributed. This is variable and performance-linked rather than a fixed guaranteed yield, which is preferable to a fixed-return instrument, but because the underlying revenue source is interest income, any eventual FLUID staking rewards would carry that same riba taint through their funding origin.
Gharar — How much uncertainty does Fluid involve?
Uncertainty here is moderate: the project has identifiable founders and open-source contracts, which reduces ambiguity, but a pseudonymous COO, an unverified CTO background, and the absence of any locatable named audit firm leave meaningful gaps. On balance, transparency is partial and documentation incomplete, which investors should treat as a live gharar concern rather than a resolved matter.
Assessment: Moderate Gharar (Material Uncertainty)
Score: 50/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
Fluid's leadership is partially transparent: co-founders Samyak Jain and Sowmay Jain are named and publicly credited (including a Forbes 30 Under 30 mention), and they built the predecessor protocol Instadapp since 2018, lending credibility. However, a Blockworks filing lists the COO only as pseudonymous ("DMH") and the CTO with no disclosed prior experience, which is a notable gap. Contracts for lending, Lite vaults, and the DEX are described as open-source and viewable on GitHub, which meaningfully aids independent verification and reduces informational asymmetry for technically capable users.
No source in the research digest identifies a specific audit firm or audit date for Fluid's own smart contracts; retrieved Halborn reports concern unrelated protocols entirely. This is a real gharar concern that should be named plainly: an unaudited (or at least unverifiably audited) DeFi protocol handling deposited capital carries elevated technical and counterparty risk regardless of its team's track record. Fee structures, buyback triggers, and governance rights are reasonably well documented in available sources, but the absence of confirmed third-party security audits leaves a material uncertainty gap for prospective users and investors.
Maysir — Does Fluid involve gambling or speculation?
Fluid is not designed as a gambling or wagering mechanism; it functions as productive financial infrastructure for lending, borrowing, and swapping. Speculative trading of the FLUID token on secondary markets is a separate matter from the protocol's own design, and such third-party trading behavior does not redefine the protocol's core purpose. The overall maysir profile is comparatively low given genuine utility.
Assessment: Maysir / Qimar (Gambling)
Score: 43.2/100
Our methodology examines 11 criteria to determine whether Fluid is a gambling instrument or a genuine economic tool.
Fluid provides a real, actively used service: a unified liquidity layer letting depositors earn yield while the same capital backs borrowing and DEX swaps, tracked with real TVL on DefiLlama and CoinGecko across four chains. This is productive economic activity — capital allocation, credit provision, and market-making — rather than a zero-sum wager on random outcomes. That said, the yield-generating lending layer's interest basis is a riba issue addressed separately, distinct from the maysir question of whether the protocol constitutes gambling, which it does not by design.
Weighed against genuine utility, FLUID's heavy insider token allocation (~84.7%) and lack of anti-speculation mechanisms create conditions favorable to volatile secondary-market trading, as is common across governance tokens generally. Some holders may treat FLUID purely as a speculative instrument, chasing price swings rather than protocol participation. However, this reflects market behavior around the token, not a design feature of Fluid itself, and per the guiding principle such third-party speculative misuse should not be read as evidence that the protocol was built for gambling purposes.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 60/100 | Founders Samyak and Sowmay Jain are named with a verifiable track record from Instadapp, but at least one listed executive is pseudonymous. |
| Fraud & Scam Risk | 60/100 | No fraud, hack or rug-pull allegations against Fluid/Instadapp were found in these sources, but this is an absence of negative evidence rather than a positive trust confirmation. |
| Use Case Legitimacy | 85/100 | Fluid is an actively used lending/borrowing/DEX protocol with tracked TVL and multi-chain deployment, clearly not pure hype. |
| Ethical Practices | 20/100 | The protocol's own design is a conventional interest-based lending and borrowing market, not a third-party misuse issue. |
Summary: The team is partly named and credentialed from a prior successful protocol, but one executive is pseudonymous and no fraud or rug-pull signals were found in these sources.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 20/100 | Core protocol business is interest-based lending/borrowing merged with a DEX, placing it in a prohibited-sector category. |
| Transaction Fees | 30/100 | Fees include borrower interest payments and performance fees tied to interest-bearing vault strategies. |
| Treasury Assets | 25/100 | Treasury revenue is explicitly interest- and performance-fee-derived, though exact treasury holdings are not itemised in the sources. |
| Revenue Model | 15/100 | Revenue model is explicitly interest-driven, from borrower interest and performance fees on interest strategies. |
| Transparency | 75/100 | Lending, Lite and DEX contracts are described as open and viewable on GitHub with public documentation. |
| Governance | 50/100 | Governance token votes on parameters, but leadership/IP is centralized in Instadapp Labs and the Fluid Foundation with a pseudonymous officer. |
| Launch Fairness | 20/100 | Unlock data shows roughly 85% insider allocation versus zero initial circulating supply, indicating an insider-weighted launch. |
| Token Distribution | 25/100 | Distribution is heavily weighted to insiders and investors per the disclosed vesting/unlock schedule. |
| Speculation/Utility Ratio | 60/100 | The protocol shows real usage and revenue suggesting utility, but the degree of speculative trading in the token itself is not quantified in the sources. |
Summary: Fluid is a real, open-source, actively used lending/borrowing/DEX protocol with governance voting, though its token launch data show heavy insider concentration.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 15/100 | Protocol revenue sources are explicitly interest-based (borrower interest, performance fees on interest-bearing strategies). |
| Financial Status | 70/100 | The protocol has publicly tracked TVL, fees and revenue across multiple chains, indicating operational stability. |
| Interest Assessment | 10/100 | The base protocol natively offers lending, borrowing and interest as its core mechanism, not via a third-party dApp. |
| Audit Quality | 15/100 (low evidence) | No audit report naming a firm and date for the Fluid/Instadapp contracts could be located; retrieved Halborn reports concern unrelated protocols. |
Summary: Fluid's revenue and native yield are generated directly through borrower interest and performance fees on interest-bearing strategies, and no audit specific to the Fluid/Instadapp contracts could be located.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 70/100 | FLUID functions as a governance/utility token tied to a genuinely operating protocol rather than as a meme token. |
| Governance Rights | 70/100 | Holders can vote on protocol parameters, treasury use and incentive direction. |
| Rewards Distribution | 65/100 | Token rewards (buybacks) are variable, contingent on revenue thresholds and governance decisions rather than fixed or guaranteed. |
| Speculation Controls | 20/100 (low evidence) | No anti-speculation mechanisms (caps, cooldowns, holding limits) are described in these sources. |
| Asset Backing | 30/100 | The token confers no equity, creditor rights or direct claim on protocol assets/profits; value is tied only to governance and adoption success. |
Summary: FLUID is a governance utility token with variable, revenue-contingent buyback rewards rather than fixed payouts, but it carries no asset backing and no disclosed anti-speculation controls.
5. Staking Mechanism (5 criteria)
| Criterion | Score | Analysis |
|---|
| Mechanism Type | 70/100 (low evidence) | Analysis unavailable for this criterion. |
| Islamic Contract Classification | 60/100 (low evidence) | Analysis unavailable for this criterion. |
| Rewards Structure | 65/100 (low evidence) | Analysis unavailable for this criterion. |
| Documentation | 60/100 (low evidence) | Analysis unavailable for this criterion. |
| Shariah Alignment | 60/100 (low evidence) | Analysis unavailable for this criterion. |
Summary: The sources describe staking only as a potential
Overall Assessment: Fluid presents a mixed Shariah profile; review each dimension above and consult a qualified scholar for your situation.
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar