Islamic Finance Principles Assessment
Riba — Does Solar involve interest?
Solar's protocol-level economics rest on transaction fees and inflationary block rewards rather than any interest-bearing lending or fixed-yield mechanism. Rewards to block producers and voters are variable, tied to network activity and delegate ranking, which structurally resembles profit-sharing rather than riba. For Muslim investors, Solar's reward architecture itself does not present a clear riba concern, though the absence of contract classification in official documentation leaves some ambiguity.
Assessment: Moderate Riba
Score: 67.4/100
Our methodology examines 10 criteria to evaluate how well Solar avoids interest-based mechanisms.
Solar generates protocol revenue from two sources: transaction fees collected by whichever block producer includes a given transaction, and a variable block reward ranging from 6.75 to 13.25 SXP (averaging 10 SXP) issued via the network's emission schedule. Ten percent of each block reward is directed to a development fund tied to the Solar Blockchain Foundation, while the remaining ninety percent stays with the producing delegate. No sources describe any interest-bearing treasury holdings, bond-like instruments, or lending-based revenue streams at the protocol level, so no direct riba exposure is evident in the base network's income model.
Solar's staking-like mechanism is actually a non-custodial voting system: holders vote for block producers using their existing balance without locking or transferring funds beyond the voting transaction itself. Returns are not fixed or guaranteed — they depend on the elected producer's rank, transaction volume, and the commission that producer chooses to retain before sharing rewards with voters. This variability, tied directly to real network activity and producer performance, aligns more closely with a permissible profit-sharing arrangement than with an interest-bearing deposit, though the sources do not formally classify it under a specific Islamic contract structure such as Wakalah or Ju'alah.
Gharar — How much uncertainty does Solar involve?
Solar carries meaningful uncertainty, primarily stemming from disclosure gaps rather than the mechanics of the blockchain itself. Open-source code and public SDKs reduce technical opacity, but missing team credentials and unconfirmed audit status leave important risk questions unanswered. On balance, the uncertainty here is disclosure-driven and warrants caution rather than an assumption of manipulative design.
Assessment: Moderate Gharar (Material Uncertainty)
Score: 53.9/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
The available materials attribute governance to a "Solar Blockchain Foundation" but do not name individual founders, executives, or their credentials for the Solar (SXP) project specifically. This absence of identifiable, accountable leadership is a genuine transparency gap. On the positive side, Solar Core's codebase is open-source on GitHub and accepts community pull requests, and SDKs are published in TypeScript, Python, JavaScript, and Solidity, allowing outside verification of protocol mechanics even where organizational transparency is lacking. Technical openness partially offsets, but does not fully resolve, the leadership-disclosure shortfall.
No security audit of the Solar Network or Solar Core codebase by any named audit firm appears in the available sources; audit reports retrieved under related searches (including Halborn) concern entirely different, unrelated projects. This is an unaudited-protocol concern that should be stated plainly: without an independent, named audit specific to Solar Core, users and investors cannot verify the codebase's security posture through third-party confirmation. Documentation on docs.solar.org does cover voting, delegate registration, and reward mechanics in reasonable detail, but the absence of a confirmed audit remains a material source of unresolved gharar.
Maysir — Does Solar involve gambling or speculation?
Solar's design centers on payments, smart contracts, and delegate-based governance rather than any wagering or zero-sum betting mechanism. Genuine network utility distinguishes it from gambling-oriented tokens, though like any tradable crypto asset it remains exposed to speculative trading in secondary markets. The protocol itself is not built as a game of chance.
Assessment: Minor Maysir (Incidental)
Score: 70/100
Our methodology examines 11 criteria to determine whether Solar is a gambling instrument or a genuine economic tool.
Solar Core is designed as functional Layer-1 infrastructure: it processes peer-to-peer payments, supports smart contracts, and enables tokens and NFTs, all secured by 53 elected block producers under a Delegated Proof of Stake model. Holders can use SXP to pay transaction fees or vote for delegates, both productive, utility-driven actions rather than wagers on random outcomes. This functional design — verifiable through open-source code and public SDKs — supports the view that the protocol's primary purpose is infrastructure provision, not speculation, which is a meaningful distinguishing factor from maysir-type structures.
Weighed against this genuine utility is the reality that SXP, like most tradable tokens, is subject to speculative trading detached from network usage, and its fixed 300-million supply with a ten-year emission schedule and multi-year vesting cliffs can create supply-driven price volatility independent of adoption. Such secondary-market speculation is a feature of crypto markets generally and is not unique to, or a deliberate design goal of, Solar itself. Applying the principle that third-party misuse or trading behavior does not redefine an asset's own purpose, Solar's underlying protocol design remains utility-oriented rather than gambling-oriented.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 30/100 | The sources attribute Solar's documentation to the "Solar Blockchain Foundation" but name no individual founders or credentialed team members for the SXP project. |
| Fraud & Scam Risk | 50/100 (low evidence) | No fraud, hack, or rug-pull incidents specific to Solar (SXP) are reported in the sources, but no trust-signal verification (audits, track record) was found either. |
| Use Case Legitimacy | 72/100 | Whitepapers describe a genuine Layer-1 blockchain for payments, smart contracts, tokens and NFTs rather than a purely speculative asset. |
| Ethical Practices | 85/100 | The protocol's own design (payments, smart contracts, NFTs) targets no prohibited industry; any third-party misuse of the chain would not change this assessment. |
Summary: Solar (SXP) is documented as a genuine Layer-1 blockchain project attributed to a foundation, but the sources name no individual founders and report no fraud or regulatory history either way.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 82/100 | Solar Core is a general-purpose Layer-1 blockchain framework, not a business in a prohibited sector. |
| Transaction Fees | 62/100 | Fees are paid to the block producer that processes the transaction (a service fee model) rather than burned or extracted as riba-like interest. |
| Treasury Assets | 50/100 (low evidence) | The sources give no information on the composition of any Solar treasury or development-fund holdings, so interest-bearing exposure cannot be assessed. |
| Revenue Model | 78/100 | Revenue comes from transaction fees and block-reward inflation, not from interest-based lending activity. |
| Transparency | 78/100 | The project publishes open-source code, SDKs, and public documentation with community contribution channels. |
| Governance | 55/100 | Governance is delegated to 53 elected block producers, which is more decentralised than a single operator but still concentrated among a small elected set. |
| Launch Fairness | 25/100 | Combined Founders (20%) and Team (20%) allocations total 40% of supply against only ~13-20% for public participants, indicating a launch weighted toward insiders. |
| Token Distribution | 28/100 | Reserve, Founders and Team allocations together dominate the 300M SXP supply, leaving a comparatively small public/community share. |
| Speculation/Utility Ratio | 55/100 | The whitepaper emphasises real utility (payments, smart contracts), but the heavy insider allocation and vesting structure suggest a meaningful speculative component alongside utility. |
Summary: Solar Core is an open-source DPoS Layer-1 supporting payments, smart contracts and NFTs, with fee/reward flows to elected block producers but a token launch weighted heavily toward founders, team and reserve allocations.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 80/100 | Protocol revenue is generated from transaction fees and block-reward inflation, with no interest-based component described. |
| Financial Status | 50/100 (low evidence) | The sources provide token unlock schedules but no broader financial stability data (reserves, revenues, runway) for the project. |
| Interest Assessment | 82/100 | The documented base protocol covers payments, smart contracts and NFTs but describes no native lending or borrowing/interest facility. |
| Audit Quality | 15/100 (low evidence) | No security audit of the Solar Network/Solar Core codebase by any named firm could be found in these sources; unrelated audits (Halborn, etc.) belong to other projects. |
Summary: Protocol revenue comes from fees and block-reward inflation with no native lending/interest function, but no audit of the Solar codebase and no broader financial-health data could be found in the sources.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 70/100 | SXP is used for transaction fees, voting/delegation, and reward earning, consistent with a functional utility token rather than a pure meme asset. |
| Governance Rights | 65/100 | Holders exercise governance by voting for block producers/delegates, giving them a direct operational governance role. |
| Rewards Distribution | 75/100 | Rewards are variable, tied to block-producer rank and transaction-fee volume, not a fixed guaranteed rate. |
| Speculation Controls | 30/100 | No burn, transfer-tax, or holding-cap mechanisms were found in the sources, suggesting limited built-in anti-speculation design. |
| Asset Backing | 40/100 | No reserve or collateral backing is described; token value is implied to rest on network utility and adoption rather than any explicit asset backing. |
Summary: SXP is a utility token used for fees, delegate voting and variable reward earning, with no backing asset or anti-speculation mechanism identified in the sources.
5. Staking Mechanism (5 criteria)
| Criterion | Score | Analysis |
|---|
| Mechanism Type | 78/100 | Voting for block producers is non-custodial, requires no locking of funds beyond the vote transaction, and terms are documented. |
| Islamic Contract Classification | 50/100 (low evidence) | The sources do not classify the reward-sharing/delegate-voting arrangement under any specific Islamic contract (Wakalah, Ju'alah, Mudarabah), leaving the classification unresolved. |
| Rewards Structure | 75/100 | Rewards derive from variable, rank-based block production and fee-sharing tied to real network activity rather than a fixed rate. |
| Documentation | 75/100 | Official documentation (docs.solar.org) discloses voting mechanics, delegate registration, and reward calculation in detail. |
| Shariah Alignment | 55/100 | Gharar appears limited given disclosed variable rewards and no lock-up, but the lack of any explicit Shariah contract classification leaves a core question unresolved. |
Summary: Solar offers a non-custodial, documented delegate-voting reward mechanism with variable, activity-based payouts, though its precise Islamic contract classification is not addressed in the sources.
Overall Assessment: Solar (SXP) presents as a functional, non-meme blockchain infrastructure project with reasonable operational transparency, but gaps in team disclosure, audit evidence, and insider-heavy token allocation leave several Shariah-relevant questions unresolved from the available sources.
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar