Islamic Finance Principles Assessment
Riba — Does Saros involve interest?
Saros's core protocol does not run on an interest-bearing lending model; its income derives from trading fees on swaps and perpetuals activity. A separate ecosystem partner, Hedge Labs, offers leveraged/interest-style products, but this sits outside Saros's own protocol and should not be conflated with it. For Muslim investors, the base Saros model itself does not present a direct riba structure, though reward emissions warrant scrutiny.
Assessment: Moderate Riba
Score: 62.6/100
Our methodology examines 10 criteria to evaluate how well Saros avoids interest-based mechanisms.
Saros generates revenue through swap fees, split roughly 0.25% to liquidity providers and 0.05% to a protocol treasury, with network gas paid separately in SOL. A secondary source describes an 80/20 LP/protocol split and an unconfirmed deflationary burn mechanism. This is a fee-for-service model tied to actual trading volume, not a fixed-return lending arrangement, and therefore does not constitute riba on its face. However, treasury asset composition is undisclosed, so it cannot be confirmed whether treasury holdings themselves generate interest income from off-protocol placements.
Native staking, branded "SarosStake," offers single-asset staking with auto-compounding rewards and fee-discount tiers, funded by a blend of actual trading-fee share and token-emission incentives. Fee-share rewards are variable and performance-linked, consistent with permissible profit participation. Emission-based rewards, however, function more like promotional subsidies unconnected to real economic output, and reported APRs of 500%-2000% suggest a speculative overlay rather than pure profit-sharing. Lock-up terms and custodial structure are undisclosed in available sources, leaving some ambiguity about the precise contractual nature of staking returns.
Gharar — How much uncertainty does Saros involve?
Saros carries moderate uncertainty: leadership is named and publicly documented, and code is open-source, which reduces informational opacity. However, unresolved audit status, inconsistent fee/burn reporting across sources, and undisclosed treasury composition increase uncertainty. On balance, gharar here is present but not extreme, driven mainly by disclosure gaps rather than outright secrecy.
Assessment: Moderate Gharar (Material Uncertainty)
Score: 50/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
Saros's leadership is transparent and named, tracing to Coin98 Labs founders Lê Thanh and Nguyễn Thế Vinh, with Lynn Nguyen serving as CEO for part of 2025. Her prior employment at FalconX, Alameda Research, and FTX US is a factual biographical detail, not evidence of wrongdoing tied to Saros. Institutional backing from Solana Ventures and Hashed, and publicly referenced GitHub code, support a reasonably transparent development posture, though treasury holdings and some fee mechanics remain incompletely disclosed.
No security audit specifically naming Saros Finance's own smart contracts appears in available documentation; a Halborn audit referenced in the source set pertains to an unrelated project, "Substance Exchange," and cannot be credited to Saros. This absence of a confirmed, named audit for Saros's own contracts is a legitimate gharar concern and is stated here plainly. Additionally, staking lock-up periods, custodial structure, and slashing risk are not specified in available sources, leaving material operational terms undisclosed to prospective participants.
Maysir — Does Saros involve gambling or speculation?
Saros is not designed as a gambling mechanism; it functions as infrastructure for spot and perpetual trading, staking, and liquidity provision. Its real, measurable trading volume and TVL indicate genuine usage rather than pure speculation. That said, high promotional emission APRs and VC-favorable token distribution introduce speculative pressures worth noting.
Assessment: Moderate Maysir (High Risk)
Score: 57.5/100
Our methodology examines 11 criteria to determine whether Saros is a gambling instrument or a genuine economic tool.
Saros provides substantive DeFi infrastructure: an AMM/DLMM exchange, a perpetuals venue, a non-custodial wallet, and launchpad tooling, generating fees from real swap and trading activity rather than from a zero-sum betting pool. Reported daily volumes (ranging from roughly $20M to cited peaks in the hundreds of millions) and TVL figures between $32.8M and $110M reflect actual usage by liquidity providers and traders. This productive, service-based function distinguishes Saros's core design from maysir, even though, like any tradable asset, its token can be used speculatively by third parties.
Weighed against this genuine utility is a token-emission structure offering promotional APRs of 500%-2000%, which incentivizes short-term speculative farming rather than long-term productive participation. Combined with a distribution skewed toward VCs who entered at $0.0025 ahead of public access, and multi-year vesting for over half the max supply, secondary-market trading in SAROS carries elevated speculative risk. This does not render the protocol itself a gambling mechanism, but it does mean cautious investors should weigh incentive-driven volatility against the platform's underlying operational substance.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 70/100 | Founders (Lê Thanh, Nguyễn Thế Vinh) and a later CEO (Lynn Nguyen) are named and traceable with public professional histories, though leadership has changed and centralised control sits with a core team. |
| Fraud & Scam Risk | 60/100 | No hack, rug-pull, or regulatory action against Saros itself is reported in the sources, but the sources provide no dedicated fraud-risk assessment of Saros specifically. |
| Use Case Legitimacy | 78/100 | The protocol operates a functioning DEX, liquidity, staking and launchpad suite with measurable volume and TVL, indicating genuine utility beyond hype. |
| Ethical Practices | 75/100 | The base protocol's own design is a trading/liquidity infrastructure, not itself built for a prohibited industry; that some listed third-party tokens are meme coins is third-party listing behaviour, not the protocol's own purpose. |
Summary: Saros has named, traceable founders and leadership with real crypto-industry track records and institutional backing, and no fraud or hack specific to Saros appears in the sources.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 80/100 | The core business is DEX/AMM/liquidity infrastructure on Solana, a sector with no inherent Shariah prohibition. |
| Transaction Fees | 65/100 | Official fee documentation shows a fixed LP/treasury split with no interest-like extraction, but a claimed burn mechanism is only cited in secondary sources, not confirmed officially. |
| Treasury Assets | 50/100 (low evidence) | Treasury token-allocation percentages are disclosed, but the actual asset composition of the treasury (e.g., whether it holds interest-bearing instruments) is not stated anywhere in the sources. |
| Revenue Model | 78/100 | Revenue comes from swap/trading fees rather than interest-based lending activity. |
| Transparency | 75/100 | Public documentation, SDKs, and GitHub references indicate an open development posture and disclosed tokenomics. |
| Governance | 45/100 | Token-weighted voting exists, but a majority-sized bloc of team, investor, treasury and reserve allocations suggests meaningful centralisation of practical control. |
| Launch Fairness | 35/100 | A private VC round sold tokens at a steep discount ($0.0025, $25M valuation) ahead of public access, which is a standard VC-backed launch, not a fair/stealth launch. |
| Token Distribution | 40/100 | Over half of the fixed 10B supply is allocated to core contributors, investors, strategic reserve and treasury, versus a smaller community/airdrop/liquidity share. |
| Speculation/Utility Ratio | 40/100 | Documented promotional farming APRs as high as 500%–2000% indicate a speculation-heavy incentive layer sitting alongside genuine DEX utility. |
Summary: Saros is a functioning Solana DEX/liquidity "super app" with disclosed fee splits and tokenomics, but governance and token allocation remain concentrated among team, investors, and reserves following a discounted VC private round.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 78/100 | Protocol revenue is fee-based (swap fees, treasury cut), not derived from interest/riba mechanisms. |
| Financial Status | 55/100 | Reported TVL and volume figures vary substantially across sources, making financial stability difficult to pin down precisely from what's provided. |
| Interest Assessment | 80/100 | The base protocol itself does not appear to offer native lending/borrowing; leverage/interest products are provided by a separate third-party protocol (Hedge Labs), not Saros core. |
| Audit Quality | 15/100 | No security audit naming Saros Finance's own smart contracts appears among the sources; the one audit present in the source set belongs to an unrelated project, so an independent audit of Saros could not be established here. |
Summary: Revenue is fee-based rather than interest-based and the base protocol does not natively offer lending, but market-size figures are inconsistent across sources and no independent audit of Saros's own contracts could be located.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 72/100 | SAROS carries clear stated utility (governance, staking, fee discounts, launchpad access) beyond pure speculation. |
| Governance Rights | 60/100 | A one-token-one-vote governance mechanism over protocol parameters and treasury is described, though its practical decentralisation is limited by allocation concentration. |
| Rewards Distribution | 55/100 | Rewards combine a variable fee-share component with token-emission subsidies at very high promotional rates, blending genuine revenue-linked reward with inflationary incentive design. |
| Speculation Controls | 50/100 | A hard supply cap and multi-year vesting cliffs on large allocations provide some anti-dump structure, but extremely high promotional farming yields work against anti-speculation intent. |
| Asset Backing | 45/100 | The token is not backed by any reserve asset; its value rests on protocol usage and fee generation, typical of a utility token but without hard backing. |
Summary: SAROS has genuine governance and fee-discount utility alongside a fixed supply and vesting schedule, but very high promotional farming yields signal a still-significant speculative incentive layer.
5. Staking Mechanism (5 criteria)
| Criterion | Score | Analysis |
|---|
| Mechanism Type | 55/100 | Native single-asset staking (SarosStake) is described with auto-compounding and fee-discount features, but custody model and lock-up terms are not specified in the sources. |
| Islamic Contract Classification | 45/100 | Fee-share staking resembles a profit-sharing arrangement, but the presence of emission-based rewards alongside it leaves the underlying Islamic contract classification unresolved in the available material. |
| Rewards Structure | 50/100 | Rewards are described as coming from real trading fees plus scheduled token emissions, a mix of variable and fixed-like elements rather than a clean variable-only structure. |
| Documentation | 40/100 | Marketing/documentation describe the staking feature at a high level, but risk disclosures such as lock-up duration, slashing, and custody are not detailed in the sources. |
| Shariah Alignment | 45/100 | The fee-share reward basis is a relatively low-gharar model, but the unclarified mix with emission subsidies and undocumented terms leaves a core question about the staking structure unresolved. |
Summary: Saros offers native single-asset staking rewarded from fee-share and emissions, but custody, lock-up, and precise contract classification are not clearly documented in the available sources.
Overall Assessment: Saros presents as a genuine, actively-used Solana DeFi protocol with real utility and disclosed but VC-concentrated tokenomics, whose main open Shariah-relevant gaps are the unaudited status of its contracts and incomplete documentation of its staking mechanics.
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar