Islamic Finance Principles Assessment
Riba — Does Resupply USD involve interest?
Resupply USD is built directly on interest: borrowers mint reUSD against collateral that itself earns lending yield, and the protocol's borrow rate is explicitly set relative to that yield and a "risk-free rate" benchmark. This is not incidental exposure but the core mechanism generating protocol revenue. For Muslim investors, this structural reliance on interest-bearing collateral and algorithmic interest rates is the decisive concern.
Assessment: Riba Dominant
Score: 17.5/100
Our methodology examines 10 criteria to evaluate how well Resupply USD avoids interest-based mechanisms.
Protocol revenue comes from borrow-rate fees and redemption fees charged on CDP debt positions, per DefiLlama figures showing roughly $2.86M annualized fees and $2.15M annualized revenue against a thin ~$176k treasury. The underlying collateral — crvUSD from Curve Lend and frxUSD from Fraxlend — is itself interest-bearing, meaning reUSD's entire backing and revenue chain is denominated in interest income. Borrow rates are set algorithmically at the greater of half the collateral yield, half a reference risk-free rate, or 2%, explicitly benchmarking the protocol's economics to interest-rate markets rather than profit-and-loss sharing.
RSUP staking rewards are paid in reUSD from actual weekly protocol revenue (redemption and borrow fees) rather than a fixed guaranteed rate, which favors a variable, performance-linked structure over a riba-like fixed coupon. However, because that revenue originates from interest-bearing CDP loans rather than trade, service, or equity-style profit, the reward stream itself carries an unresolved riba-adjacent character even though its distribution mechanic is variable. The 14-day unstaking cooldown with no accrual during that period is a liquidity feature, not a compliance mitigant.
Gharar — How much uncertainty does Resupply USD involve?
Resupply carries moderate-to-significant uncertainty: institutional backing from Convex and Yearn is reassuring, but pseudonymous individual contributors, a live post-mortem from an active exploit, and gaps in core-contract auditing raise real disclosure concerns. Documentation is otherwise reasonably thorough. On balance, the uncertainty is elevated enough to warrant caution rather than dismissal.
Assessment: Excessive Gharar (High Uncertainty)
Score: 36.7/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
Resupply presents itself as a subDAO collaboration "Made by Convex and Yearn," lending institutional credibility, yet individual contributors are referenced only by pseudonymous handles like "C2tP" and "Winthorpe" in coverage of the June 2025 exploit response. Code is referenced as viewable via GitHub through DefiLlama. The combination of named institutional sponsors with unnamed individual developers is a partial-transparency structure: stronger than fully anonymous projects, weaker than fully doxxed teams, leaving governance accountability only partially resolved for outside evaluators.
Only the peripheral sreUSD vault has a named, dated audit — yAudit, fieldwork July 2025, report dated November 2025, with reviewers HHK and adriro finding no critical or high issues. No named audit of the core Resupply Market/CDP contracts appears in available sources; one report vaguely states the exploited code "had undergone multiple security audits" without naming any firm, and this code was nonetheless drained of $9.5-10M via oracle manipulation in June 2025. This absence of a named, verifiable core-contract audit is a genuine gharar concern and should be treated as such.
Maysir — Does Resupply USD involve gambling or speculation?
Resupply USD is not designed as a gambling or speculative instrument; it functions as CDP-based lending infrastructure producing a stablecoin. The main speculative exposure lies in secondary-market trading of RSUP rather than in reUSD's core design. Overall, the protocol's function is productive rather than wagering-based.
Assessment: Maysir / Qimar (Gambling)
Score: 34.1/100
Our methodology examines 11 criteria to determine whether Resupply USD is a gambling instrument or a genuine economic tool.
reUSD serves a genuine economic function: it lets holders of yield-bearing stablecoin positions (crvUSD, frxUSD) unlock additional liquidity by minting reUSD against up to roughly 95% loan-to-value, while the underlying collateral continues earning its lending yield elsewhere. This is capital-efficiency infrastructure for existing DeFi collateral, not a chance-based payout mechanism. The sreUSD vault further channels real protocol revenue to holders without lockups, reinforcing a utility-driven, non-speculative design intent.
Adoption metrics — annualized fees near $2.86M and revenue near $2.15M — indicate genuine usage rather than pure speculative churn, and RSUP's governance-and-fee-sharing utility gives it a functional purpose beyond price wagering. That said, RSUP's steep, insider-heavy allocation (74% to insiders per DefiLlama) and thin treasury raise the risk of speculative secondary-market dynamics detached from fundamentals. Such trading behavior by third parties does not itself change the protocol's own non-gambling design, but it is a factor investors should weigh.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 50/100 | Institutional affiliation with Convex and Yearn is directly stated, but individual protocol contributors are referenced only by pseudonymous handles. |
| Fraud & Scam Risk | 35/100 | A June 2025 exploit drained roughly $9.5-10 million; the team's transparent recovery response mitigates but does not erase this trust event. |
| Use Case Legitimacy | 70/100 | The protocol has genuine DeFi lending/stablecoin utility with real TVL and usage, not pure hype. |
| Ethical Practices | 20/100 | The protocol's own design is an interest-based CDP lending system built on interest-bearing collateral, a haram feature by construction rather than third-party misuse. |
Summary: Resupply is backed by established DeFi entities Convex and Yearn but has pseudonymous individual contributors and suffered a significant 2025 exploit that the team addressed transparently through a recovery plan.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 20/100 | The base protocol's core business is interest-based lending against yield-bearing collateral. |
| Transaction Fees | 20/100 | Fees consist of borrow-rate interest and redemption fees, which is riba-like extraction rather than a burn or purely fair fee. |
| Treasury Assets | 15/100 | Collateral backing reUSD is itself interest-bearing lending positions on Curve Lend/Fraxlend. |
| Revenue Model | 15/100 | Revenue model is explicitly interest income from CDP borrowing fees. |
| Transparency | 65/100 | Documentation is comprehensive and code is referenced as viewable on GitHub. |
| Governance | 25/100 | Governance token voting exists but insiders/subDAOs reach 74% of final allocation, indicating heavy centralisation. |
| Launch Fairness | 20/100 | There was no fair public launch; allocations were heavily pre-assigned to Convex, Yearn, Prisma and treasury insiders. |
| Token Distribution | 15/100 | Tracked unlock data shows insiders reaching 74% of the final token distribution. |
| Speculation/Utility Ratio | 65/100 | The token supports real borrowing/lending utility rather than functioning as pure speculation. |
Summary: The protocol issues reUSD via CDPs against yield-bearing stablecoin collateral from Curve Lend and Fraxlend, with governance concentrated among insider subDAOs despite open documentation and code.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 15/100 | Protocol revenue is sourced from interest fees charged on CDP loans. |
| Financial Status | 30/100 | The June 2025 exploit generated millions in bad debt that is still being worked off, indicating financial fragility. |
| Interest Assessment | 10/100 | The protocol is itself a lending/borrowing system with an explicit formulaic interest rate. |
| Audit Quality | 35/100 | The auxiliary sreUSD vault was audited by yAudit with no critical/high findings, but the core CDP/Market contracts that were exploited have no named audit in these sources. |
Summary: Protocol revenue and the base lending mechanism are explicitly interest-based, financial scale is modest post-hack, and only the auxiliary sreUSD vault has a named third-party audit while the exploited core CDP contracts lack disclosed audit coverage.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 65/100 | reUSD and RSUP serve genuine utility functions (stable medium of exchange, governance) rather than meme purposes. |
| Governance Rights | 40/100 | RSUP holders have documented voting rights, but power is concentrated among insider subDAOs. |
| Rewards Distribution | 30/100 | Rewards are variable and tied to actual protocol revenue, but that revenue itself is interest income. |
| Speculation Controls | 25/100 | Only a 14-day unstaking cooldown is documented; no explicit anti-speculation mechanism is described in the sources. |
| Asset Backing | 15/100 | reUSD is backed by interest-bearing collateral positions held on external lending markets. |
Summary: reUSD and RSUP serve genuine utility roles rather than meme speculation, but rewards and backing both trace back to interest income generated on external lending markets.
5. Staking Mechanism (5 criteria)
| Criterion | Score | Analysis |
|---|
| Mechanism Type | 55/100 | Staking is direct and non-custodial with a clearly documented 14-day withdrawal delay. |
| Islamic Contract Classification | 15/100 | The reward pool is funded by interest income from CDP loans, making the arrangement closer to an interest-bearing structure than a clean Mudarabah/Wakalah/Ju'alah contract. |
| Rewards Structure | 20/100 | Reward amounts vary, but the funding source behind them is interest-based protocol revenue. |
| Documentation | 70/100 | docs.resupply.fi documents cooldown periods, fee splits, and distribution mechanics in detail. |
| Shariah Alignment | 15/100 | The core revenue source underlying rewards is interest income, an unresolved and decisive Shariah concern for the whole structure. |
Summary: RSUP staking is a direct, non-custodial, well-documented mechanism with variable revenue-based rewards, though the underlying revenue source is interest income rather than a clean profit-sharing activity.
Overall Assessment: Resupply is a legitimate, actively-used DeFi lending/stablecoin infrastructure project, but its core design of interest-based CDP borrowing against interest-bearing collateral raises a decisive, unresolved riba concern that affects most of the protocol's revenue, backing, and staking reward chain.
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar