Islamic Finance Principles Assessment
Riba — Does Hatom involve interest?
Hatom's foundational product is an interest-bearing lending market: borrowers pay a variable Borrow APY, suppliers earn a Supply APY, and the protocol takes a cut via the Reserve Factor. This is riba by design, not an incidental feature. For Muslim investors, this is a first-order disqualifying concern rather than a peripheral one.
Assessment: Riba Dominant
Score: 24/100
Our methodology examines 10 criteria to evaluate how well Hatom avoids interest-based mechanisms.
Hatom's primary revenue stream is borrower-paid interest from its Money Market, supplemented by liquid-staking spreads and USH facilitator fees. This revenue is used to buy back HTM on the open market and redistribute it to stakers and suppliers. Because the core protocol revenue originates from interest charged on loans — a variable but still interest-denominated mechanism — the treasury and reward pool are fundamentally riba-derived. The USH stablecoin's overcollateralization by crypto assets does not change the interest-bearing nature of the lending side that generates most protocol income.
Reward structures vary in character. The Booster and USH Staking Module distribute HTM sourced from protocol revenue (i.e., interest income), which ties them back to riba regardless of their variable, performance-linked payout. The "Accumulator," by contrast, is explicitly marketed as offering a "stable and predictable rate of return," language that mirrors a fixed-return deposit product — a stronger riba signal than ordinary variable staking yield. Liquid staking of EGLD itself (network staking rewards) is comparatively less concerning, but its rewards flow through a protocol whose overall economics are interest-anchored.
Gharar — How much uncertainty does Hatom involve?
Uncertainty around Hatom is moderate: the team, documentation, and code are unusually transparent for a DeFi project, which reduces gharar. What increases it is thin secondary-market liquidity, an undisclosed-timing PeckShield audit, and an advisor conflict of interest on one audit. On balance, informational uncertainty is manageable but not negligible.
Assessment: Excessive Gharar (High Uncertainty)
Score: 47.7/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
Hatom's team is named and verifiable: CEO Ahmed Serghini, CTO Leutrim Arifi, CTO Franco Scucchiero, and other named co-founders and executives with public LinkedIn profiles, plus disclosed advisors including Grigore Rosu and Mauro Casselini. The company maintains offices in Geneva/Lausanne, Pristina, and Doha. Code is open-source on GitHub with extensive documentation covering the Money Market, liquid staking, USH, and Booster mechanics. This level of identifiable accountability and public code materially reduces gharar relative to anonymous or undocumented projects.
Three audits were located: Arda's review of the stablecoin facilitator (dated March 2025, issues resolved), a PeckShield audit of the Hatom Protocol (undated), and a Runtime Verification report — though RV's CEO is also a named Hatom advisor, a conflict of interest worth flagging. Mechanics for lending, staking, and USH are well-documented, but slashing conditions and lock-up terms beyond the Accumulator are not clearly specified. The combination of multiple audits with one undated report and one conflicted reviewer is a genuine but moderate gharar concern.
Maysir — Does Hatom involve gambling or speculation?
Hatom is not designed as a speculative or gambling instrument; it is a functioning lending, staking, and stablecoin infrastructure. Some speculative trading of HTM occurs on secondary markets, as with virtually any listed token, but this is external behavior, not the protocol's design intent. The underlying utility is real and productive.
Assessment: Maysir / Qimar (Gambling)
Score: 40.7/100
Our methodology examines 11 criteria to determine whether Hatom is a gambling instrument or a genuine economic tool.
Hatom provides genuine economic functions: borrowers access liquidity against collateral, suppliers earn yield from real lending demand, EGLD holders obtain liquid staking derivatives (sEGLD/xEGLD) usable elsewhere in DeFi, and USH offers a collateral-backed stablecoin for payments and trading pairs. These are productive financial services analogous to conventional lending and asset-management infrastructure, not zero-sum bets on price movement. This utility-driven design distinguishes Hatom from maysir-oriented tokens whose sole function is speculative price exposure.
Against this utility, HTM's market profile shows relatively low trading volume (ranging from roughly four to over a hundred thousand dollars in 24-hour volume across observed snapshots) and a low volume-to-market-cap ratio, suggesting the token is not primarily a high-turnover speculative vehicle at present. Vesting schedules for team, investors, and advisors also temper short-term speculative dumping. While any tradable token can attract speculative behavior in secondary markets, this incidental trading does not override Hatom's underlying design as a utility and yield-infrastructure protocol.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 78/100 | Multiple named founders, executives and advisors with public LinkedIn profiles and traceable professional histories are documented. |
| Fraud & Scam Risk | 60/100 | No direct fraud, hack or rug-pull indicator against Hatom was found, and audits exist, but no dedicated fraud-history verification for Hatom specifically was located in these sources. |
| Use Case Legitimacy | 78/100 | Sources describe a functioning DeFi ecosystem with lending, borrowing, liquid staking and a stablecoin, indicating genuine utility rather than pure hype. |
| Ethical Practices | 30/100 | The protocol's own core design is a conventional interest-based lending/borrowing market, which is a structural riba concern rather than third-party misuse. |
Summary: The team behind Hatom is named, credentialed and publicly traceable, with no direct fraud or regulatory action found against the project itself in these sources.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 20/100 | The base protocol's core business is interest-rate-driven lending and borrowing (Supply/Borrow APY), placing it in a prohibited-sector-adjacent category under Islamic finance. |
| Transaction Fees | 20/100 | Transaction/interest fees are captured as a "Reserve Factor" from borrower interest and retained/recycled into buybacks rather than avoided, reflecting riba-like extraction. |
| Treasury Assets | 50/100 | Treasury token allocation and vesting are disclosed, but the sources do not specify whether treasury holdings include any interest-bearing instruments. |
| Revenue Model | 10/100 | Protocol revenue is explicitly generated from borrower-paid interest across the Lending Protocol, Liquid Staking and USH facilitators. |
| Transparency | 78/100 | Code is on public GitHub repositories, extensive documentation exists, and multiple audit reports are published. |
| Governance | 45/100 | A DAO governs node-operator approval and risk parameters, but the validator set is described as "permissioned," indicating meaningful centralisation. |
| Launch Fairness | 30/100 | Seed and private-sale investors bought HTM at a discount ($0.2667–$0.3) versus the public sale price ($0.4), indicating insider price advantage typical of VC-backed launches. |
| Token Distribution | 40/100 | Token allocation spans public/private sale, team, treasury, ecosystem and liquidity, but team, seed, private-sale and advisor tranches together constitute a large insider-weighted share. |
| Speculation/Utility Ratio | 50/100 | HTM has functional utility (boosting, collateral, staking) but low trading volume and heavy reliance on yield amplification suggest a mixed speculation/utility balance. |
Summary: Hatom is a real DeFi ecosystem on MultiversX offering lending, liquid staking and a stablecoin, but its launch involved discounted insider sale rounds and its fee model recycles borrower interest into token buybacks rather than avoiding it.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 10/100 | Protocol revenue is explicitly interest-derived from borrowing activity, a core riba-based revenue source. |
| Financial Status | 35/100 | Reported 24h trading volumes are very low relative to market cap, indicating limited market liquidity and stability. |
| Interest Assessment | 10/100 | The base protocol runs an interest-rate lending market with Supply/Borrow APY set by utilization, a direct interest mechanism at the protocol level. |
| Audit Quality | 65/100 | Named audit firms (Arda, dated March 2025; Peckshield; Runtime Verification) have reviewed Hatom's contracts, though one auditor's CEO is also a Hatom advisor, a disclosed conflict-of-interest concern. |
Summary: Protocol revenue is explicitly interest-based from its own lending market, trading liquidity appears thin, and while several named audit firms have reviewed the code, one auditor has a disclosed advisory tie to the project.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 60/100 | HTM has documented functional uses (booster staking, USH collateral, staking rewards) beyond pure speculation. |
| Governance Rights | 40/100 | A DAO exists for specific decisions like node-operator approval, but broad token-holder voting rights over general protocol parameters are not clearly documented. |
| Rewards Distribution | 40/100 | Most rewards are described as variable and revenue-linked, but the "Accumulator" is explicitly marketed as offering a "stable and predictable rate of return," resembling a fixed-return feature. |
| Speculation Controls | 25/100 | Only vesting schedules for insiders were found; no broader anti-speculation mechanisms (e.g., trading limits) are documented. |
| Asset Backing | 40/100 | HTM's value is supported mainly by protocol-revenue-funded buybacks and ecosystem utility rather than tangible halal asset backing. |
Summary: HTM carries genuine utility functions like collateral and reward-boosting, but its value is largely supported by revenue-funded buybacks and it lacks clear anti-speculation design.
5. Staking Mechanism (5 criteria)
| Criterion | Score | Analysis |
|---|
| Mechanism Type | 55/100 | Liquid staking is non-custodial via delegated, DAO-approved node operators, and HTM/Booster staking is documented, though the validator set is permissioned rather than fully open. |
| Islamic Contract Classification | 15/100 | Staking and booster rewards are funded by interest-based lending revenue, making clean classification under Mudarabah/Wakalah difficult and raising an unresolved Qard-with-increment-like concern. |
| Rewards Structure | 25/100 | Rewards are largely revenue-linked and variable, but the Accumulator's promise of a "stable and predictable" return introduces a fixed-return-like element inconsistent with pure profit-sharing. |
| Documentation | 75/100 | Detailed documentation covers staking mechanics, rewards sourcing, and protocol math across multiple doc pages. |
| Shariah Alignment | 15/100 | The underlying reward source is interest-based lending revenue, leaving a core Shariah question about the permissibility of the yield unresolved. |
Summary: Hatom offers several native staking products (liquid staking, HTM Booster, USH staking, Accumulator) that are well documented but ultimately derive their rewards from interest-based protocol revenue, leaving their Islamic contract classification unresolved.
Overall Assessment: Hatom is a legitimate, transparent, well-documented DeFi protocol, but its core business model is built on conventional interest-based lending and staking rewards, which raises a significant unresolved riba concern at the protocol's core rather than from third-party misuse.
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar