Islamic Finance Principles Assessment
Riba — Does Soil involve interest?
Soil's business model is explicitly interest-based: it lends stablecoins to SME borrowers and pays lenders yield derived from that borrower-paid interest, keeping the spread as protocol revenue. This is not an incidental exposure but the foundational mechanism of the entire protocol. For Muslim investors, this places Soil's core revenue and reward engine in direct conflict with the prohibition of riba.
Assessment: Riba Dominant
Score: 18/100
Our methodology examines 10 criteria to evaluate how well Soil avoids interest-based mechanisms.
Soil's revenue is generated as the margin between interest charged to SME borrowers and yield paid to stablecoin lenders, per the protocol's own description of its debt-marketplace model. This spread funds buybacks and burns of SOIL, meaning token value accrual is directly tied to interest income rather than trade, equity participation, or asset-backed profit-sharing. Treasury allocation is roughly 18-19% of supply, but the composition of treasury holdings is undisclosed, so it cannot be confirmed whether treasury assets themselves are held in interest-bearing instruments beyond the loan book. The revenue mechanism itself is unambiguously interest-based.
Rewards to SOIL stakers and lenders are described on the official site as "Fixed," with a base APR of roughly 7-8% sourced from institutional credit and loan interest, boosted by locking SOIL. A fixed, predetermined return paid regardless of the actual performance or risk profile of underlying loans is a classic riba structure rather than a profit-and-loss-sharing arrangement. One source mentions a "liquid staking system," but this affects liquidity, not the nature of the return. Since the underlying reward source is interest paid by borrowers, both the mechanism and the origin of yield fail the basic requirement of risk-sharing.
Gharar — How much uncertainty does Soil involve?
Uncertainty in Soil is moderate: the team and business model are clearly disclosed, but key operational and financial details remain opaque. Documentation quality is inconsistent, drawing heavily on promotional material rather than rigorous official disclosure. On balance, transparency around governance, treasury composition, and audit verification leaves meaningful ambiguity for a prospective user.
Assessment: Excessive Gharar (High Uncertainty)
Score: 35/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
Soil's leadership is named and traceable, including CEO Jakub Bojan, CIO Nick Motz, CTO Mateusz Mach, and CMO Michael Maciuk, alongside named advisors, with the company registered in Estonia since roughly 2021. This is a meaningful transparency advantage over anonymous teams. However, governance is described as centralized around the operating company with no on-chain voting mechanism detailed, and treasury composition is not disclosed despite an 18-19% supply allocation. The gap between named leadership and undisclosed operational mechanics leaves real uncertainty about control and financial safeguards.
CryptoTotem states Soil "has been audited by Hacken with the security score 10/10," but no report link, scope, or date is provided in available sources, making this claim unverifiable. A Halborn audit report exists in the broader research set but belongs to an unrelated protocol, Substance Exchange, and cannot be credited to Soil. Documentation exists via a whitepaper and FAQ, but much operational detail comes from third-party promotional Medium posts rather than official technical disclosure. Custodial status of the off-chain loan and underwriting layer is not clearly specified. The absence of a verifiable, independently confirmed audit is a legitimate gharar concern that should be named plainly.
Maysir — Does Soil involve gambling or speculation?
Soil does not exhibit gambling-like or zero-sum speculative design; its stated purpose is connecting lenders to real SME borrowers through a debt marketplace, not wagering on price movements. This productive, revenue-generating structure distinguishes it from maysir-type instruments, though secondary-market trading of SOIL itself carries typical speculative risk common to most tokens.
Assessment: Maysir / Qimar (Gambling)
Score: 37.3/100
Our methodology examines 11 criteria to determine whether Soil is a gambling instrument or a genuine economic tool.
Soil's stated function is a real-world lending marketplace: stablecoin capital from crypto lenders is deployed to SME borrowers through private debt fund managers, generating yield from productive economic activity rather than from a zero-sum betting pool. This is a genuine utility-driven design, not a game of chance, and buybacks are funded by actual revenue rather than token emissions. Productive deployment of capital toward real borrowers is fundamentally different from maysir, even though the interest-based nature of that lending raises separate riba concerns addressed elsewhere in this analysis.
Beyond its lending function, SOIL trades on secondary markets like any other token, and price movements driven by speculation are possible regardless of the protocol's underlying utility. This speculative trading behavior is common to virtually all listed tokens and is not unique to Soil's design, nor does it stem from a gambling-like mechanism built into the protocol itself. Weighing the two, Soil's core utility is grounded in genuine lending activity rather than chance-based speculation, so maysir concerns here are secondary to the more significant riba considerations already identified.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 70/100 | Team members and advisors are named with stated credentials and the operating entity's registration location is disclosed. |
| Fraud & Scam Risk | 55/100 | No hack, rug-pull, or enforcement action against Soil itself appears in these sources, but the unrelated fraud cases retrieved provide no positive trust signal either, and financial claims (e.g., revenue figures) are unverified. |
| Use Case Legitimacy | 60/100 | The protocol has a clearly stated real-world use case (RWA-backed SME lending) rather than being pure hype, though the use case itself is an interest-based lending business. |
| Ethical Practices | 20/100 | The protocol's own design is built around earning and paying interest (arbitrage of borrower interest vs lender yield), which is a core, not incidental, feature of the coin's own business model. |
Summary: Soil has a named, credentialed team and a registered operating entity with no documented fraud or hack specific to the project in these sources, though its core business is explicitly interest-based lending.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 15/100 | The base protocol's core business is interest-based lending/debt financing, a sector directly implicating riba by its own stated design. |
| Transaction Fees | 25/100 | Protocol fees are explicitly the commission captured from the interest-rate spread between borrowers and lenders, i.e., riba-like extraction rather than a flat service fee. |
| Treasury Assets | 30/100 (low evidence) | Treasury composition is not disclosed in these sources beyond an allocation percentage, so whether it holds interest-bearing instruments cannot be established. |
| Revenue Model | 15/100 | Revenue is explicitly generated from interest paid by borrowers, a direct riba-based revenue source. |
| Transparency | 45/100 | A whitepaper and FAQ exist, but there is no clear statement of open-source smart contracts for the core lending protocol in these sources. |
| Governance | 30/100 | Governance appears centered on the operating company with no described DAO or on-chain voting mechanism. |
| Launch Fairness | 30/100 | Token sale used tiered seed/private/public pricing favoring early insiders, which is not a fair launch structure. |
| Token Distribution | 35/100 | A substantial share of supply is allocated to team, treasury, foundation and investor categories relative to community allocations, per the tokenomics tables. |
| Speculation/Utility Ratio | 45/100 | The token has stated utility functions (revenue capture, staking boosts) beyond pure speculation, but much of its promotion emphasizes yield/return figures rather than usage. |
Summary: The protocol is a centralized-leaning RWA debt marketplace earning fees from interest-rate spreads, with a VC-style token launch and multi-year vesting rather than a fair community distribution.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 15/100 | Protocol revenue is explicitly interest income from loans to businesses. |
| Financial Status | 40/100 | A revenue figure is cited in a promotional source but is not independently verified, and no audited financial statements appear. |
| Interest Assessment | 5/100 | The base protocol directly performs interest-based lending and borrowing as its central function. |
| Audit Quality | 35/100 | A Hacken audit with a claimed perfect score is mentioned without a linked report or date, and the Halborn report found in these sources is for a different, unrelated protocol. |
Summary: Revenue is explicitly interest income from SME loans, financial disclosures are largely unverified promotional claims, and while an audit is mentioned, no verifiable audit report tied specifically to Soil could be confirmed in these sources.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 45/100 | SOIL is described as a utility/reward token tied to protocol revenue rather than a pure meme token, though the underlying revenue is interest-based. |
| Governance Rights | 30/100 | Governance participation is mentioned in marketing language but no concrete voting or rights mechanism is described. |
| Rewards Distribution | 20/100 | Rewards are explicitly described as fixed APR sourced from loan interest, resembling a guaranteed interest-like return rather than variable profit-sharing. |
| Speculation Controls | 40/100 | Buyback-and-burn funded by revenue and multi-year vesting provide some speculation dampening, but no explicit anti-speculation policy is detailed. |
| Asset Backing | 30/100 | The token/protocol is backed by RWA-collateralized loans, but the underlying loans themselves are interest-bearing, weakening halal-asset backing. |
Summary: SOIL is a utility/reward token that captures protocol revenue and boosts fixed lending yields, but its reward mechanics are explicitly interest-based rather than genuine variable profit-sharing.
5. Staking Mechanism (5 criteria)
| Criterion | Score | Analysis |
|---|
| Mechanism Type | 40/100 | Staking/locking is described as wallet-based and at least partly withdrawable, suggesting non-custodial design, but conflicting statements on lock-up terms leave the mechanism unclear. |
| Islamic Contract Classification | 10/100 | The staking/lending yield is explicitly a fixed interest-bearing arrangement, resembling Qard-with-increment rather than a Mudarabah/Wakalah profit-share. |
| Rewards Structure | 15/100 | Rewards are explicitly stated as fixed APR derived from borrower interest rather than variable performance-based profit-sharing. |
| Documentation | 40/100 | A whitepaper and FAQ exist, but much operational detail comes from informal third-party blog posts rather than comprehensive official documentation with disclosed risks. |
| Shariah Alignment | 15/100 | The core mechanism rests on an unresolved, indeed explicit, interest-based structure, which is a decisive Shariah concern rather than a resolved edge case. |
Summary: Soil offers a staking/locking mechanism whose rewards are sourced from interest-based lending revenue, with inconsistent documentation on lock-up terms and no slashing described.
Overall Assessment: Soil is a legitimately operated, real-utility RWA lending platform, but its foundational design is built on interest-based lending and fixed-yield mechanics, which raises a core, unresolved Shariah concern rather than an incidental or third-party one.
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar