Islamic Finance Principles Assessment
Riba — Does Somnia involve interest?
Somnia's base-layer economics show no evidence of interest-based lending or fixed-return promises. Revenue is generated purely through gas fees, half burned and half distributed to network participants, with no treasury allocation to interest-bearing instruments disclosed. For Muslim investors, the protocol's own revenue model does not raise a riba concern.
Assessment: Minor Riba
Score: 71/100
Our methodology examines 10 criteria to evaluate how well Somnia avoids interest-based mechanisms.
Somnia's revenue comes entirely from transaction/gas fees on the network, split 50% permanently burned and 50% distributed to validators and delegators. No sources indicate that treasury funds are placed into interest-bearing accounts, bonds, or lending markets. This fee-burn/distribution structure resembles a usage-based service charge rather than an interest mechanism, since the amount collected fluctuates with actual network activity rather than being a predetermined return on capital lent. Based on available disclosures, there is no riba embedded in Somnia's base-protocol income model, though third-party dApps built atop the chain (outside Somnia's own control) could theoretically introduce lending features requiring separate scrutiny.
Staking rewards on Somnia are explicitly variable, sourced from the 50% gas-fee share plus treasury incentives, and are not generated through token inflation or a fixed guaranteed rate. This variability is a meaningful distinguishing factor from riba-like fixed-interest arrangements, since returns rise or fall with genuine network usage rather than being promised in advance. However, an emergency unstake penalty of up to 50% (redirected to treasury) introduces a lock-up cost structure whose Islamic contractual classification (e.g., Wakalah, Ju'alah, or Mudarabah) is not specified in available documentation, leaving a definitional gap that a stricter reviewer may wish to see clarified.
Gharar — How much uncertainty does Somnia involve?
Our assessment of Somnia on this principle is set out below.
Assessment: Moderate Gharar (Material Uncertainty)
Score: 59.7/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
Somnia's leadership is unusually transparent for the sector: founder Paul Thomas has a verifiable LinkedIn profile with a decade-plus Improbable career and Goldman Sachs background, Herman Narula is publicly named as Founder/CEO, and multiple team members (COO, engineers, growth staff) are traceable. The mainnet is live and was preceded by a testnet processing over 10 billion transactions with 118 million wallets onboarded, evidencing real operational history rather than vaporware. Extensive public developer documentation exists, though explicit confirmation that the core protocol repository is open-source was not located in available sources, leaving one transparency gap amid otherwise strong disclosure.
Audit coverage is present but uneven. Hacken conducted both a smart-contract audit and a separate audit of the L1/PBFT consensus and Staking-Committee mechanics (dated May and August 2025), with findings fixed, accepted, or mitigated. However, CertiK's Skynet scan of a specific contract instance explicitly flags "Not Audited By CertiK" and "3rd Party Audit: No" for that scope, meaning coverage varies by contract rather than being total. Governance is also described as mid-"phased transition," with 65.49% major-holder concentration reported by CertiK. These gaps in universal audit coverage and governance clarity constitute a real, named gharar concern rather than a resolved matter.
Maysir — Does Somnia involve gambling or speculation?
Somnia's protocol design centers on infrastructure utility rather than chance-based payout mechanics, distinguishing it from gambling-oriented tokens. Speculative trading can occur on any listed asset in secondary markets, but this is a market behavior separate from the coin's intended design. On balance, Somnia's own mechanics do not constitute maysir.
Assessment: Minor Maysir (Incidental)
Score: 70/100
Our methodology examines 11 criteria to determine whether Somnia is a gambling instrument or a genuine economic tool.
Somnia is built as high-throughput Layer-1 infrastructure targeting gaming, social, metaverse, and DeFi applications, with claimed capacity above 1 million TPS and sub-second finality. Its testnet processed over 10 billion transactions and onboarded more than 70 ecosystem partners, indicating real developer and user engagement rather than a purely speculative vehicle. Staking rewards derive from actual gas-fee activity, and the burn mechanism ties token scarcity to genuine network usage. This productive, utility-driven design — a base layer for applications rather than a chance-based payout scheme — is what separates Somnia from gambling instruments, even though its token, like any liquid asset, can be traded speculatively by third parties.
Against this genuine utility must be weighed the realities of secondary-market behavior: only roughly 16% of supply circulated at TGE, with large team, investor, and advisor allocations vesting over 36-48 months, a structure that can incentivize short-term speculative trading around unlock events. High-concentration holdings (65.49% per CertiK) further raise the possibility of price volatility driven by large holders rather than organic usage. Per the applicable judgment principle, such secondary-market speculation by traders is not attributable to Somnia's own design and does not itself render the protocol impermissible, though prudent investors should weigh this volatility risk carefully.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 85/100 | Founder and multiple team members are named, credentialed and traceable via LinkedIn with verifiable professional histories. |
| Fraud & Scam Risk | 70/100 | No fraud or rug-pull indicators tied to Somnia appear in the sources, but this is inferred from absence of adverse reports rather than a direct clearance statement. |
| Use Case Legitimacy | 85/100 | Sources document real mainnet usage, testnet transaction volumes, and dozens of ecosystem partners across gaming, social and DeFi use cases. |
| Ethical Practices | 75/100 | The base protocol is designed as general-purpose infrastructure for gaming, social and DeFi apps, with no haram-specific design element in its own architecture. |
Summary: Somnia has a publicly named, credentialed founding team with a traceable prior track record and no fraud indicators found in these sources.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 85/100 | The base protocol is a general-purpose EVM Layer-1, not itself operating in a prohibited sector. |
| Transaction Fees | 85/100 | Fees are split transparently, 50% burned and 50% distributed to validators/delegators, with no interest-like extraction described. |
| Treasury Assets | 50/100 | Treasury/ecosystem incentive allocations appear denominated largely in native SOMI, but detailed composition of held reserve assets is not clearly disclosed, and a related ecosystem stablecoin (USDso) is backed by interest-bearing Treasury bills via a third-party issuer. |
| Revenue Model | 80/100 | Revenue at the base-protocol level is gas-fee based with no interest income described. |
| Transparency | 65/100 | Tokenomics and audit findings are extensively documented, but explicit confirmation that the core protocol codebase is open-source was not found. |
| Governance | 35/100 | Sources describe a "phased governance transition" implying present centralization, and CertiK data shows a very high major-holder concentration. |
| Launch Fairness | 45/100 | Token allocation shows substantial pre-assigned shares to team, investors, launch partners and advisors under vesting, rather than a fully open/fair launch. |
| Token Distribution | 55/100 | Distribution tables show roughly 45% to insiders (team/investors/advisors/launch partners) versus 55% to community/ecosystem allocations. |
| Speculation/Utility Ratio | 55/100 | Genuine utility functions (gas, staking, collateral) exist alongside heavy promotion of speculative DeFi (leverage, perps, collateral use) built atop the token. |
Summary: The base protocol is a general-purpose EVM Layer-1 with a transparent burn/distribute fee model but currently centralizing governance and an insider-heavy, vested token launch.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 80/100 | Protocol revenue is limited to gas fees with no interest-based revenue stream at the base-protocol level. |
| Financial Status | 55/100 | Usage and adoption metrics are documented, but no detailed financial statements or treasury solvency data were found. |
| Interest Assessment | 75/100 | The base Layer-1 itself has no native lending or borrowing function; lending/borrowing exists only via third-party dApps built on the chain. |
| Audit Quality | 70/100 | Hacken audited both smart contracts and the core L1/staking system in 2025 with named, dated, published findings, though coverage varies by contract (e.g., CertiK notes a separate contract as unaudited by it). |
Summary: Revenue comes purely from gas fees with no protocol-level lending or interest, and the chain has partial but real third-party security audit coverage from a named firm.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 80/100 | SOMI is used for gas, staking, and referenced as collateral/governance, consistent with a functional utility token rather than a meme. |
| Governance Rights | 40/100 | Governance rights are referenced ("governance tool") but concrete voting/participation mechanics are not detailed, and governance itself is described as still centralizing. |
| Rewards Distribution | 80/100 | Rewards are explicitly variable, tied to real gas-fee volume rather than fixed emissions or guaranteed rates. |
| Speculation Controls | 40/100 | Vesting schedules reduce dump risk for insiders, but CertiK data shows no anti-whale, tax, or other anti-speculation trading constraints enabled. |
| Asset Backing | 55/100 | The token is not backed by external reserve assets; its value proposition rests on fixed supply, fee-burn deflation, and network utility. |
Summary: SOMI is a utility token with usage-driven, variable rewards and fixed deflationary supply, though concrete governance rights and dedicated anti-speculation controls are only weakly evidenced.
5. Staking Mechanism (5 criteria)
| Criterion | Score | Analysis |
|---|
| Mechanism Type | 65/100 | Staking is delegated PoS with disclosed validator stake requirements, delegation flow, and an unstake-penalty mechanism. |
| Islamic Contract Classification | 40/100 (low evidence) | Sources describe the staking structure mechanically but do not classify it under any Islamic contract type, leaving the core classification question unaddressed. |
| Rewards Structure | 80/100 | Rewards are explicitly sourced from real transaction-fee activity rather than fixed or guaranteed issuance. |
| Documentation | 70/100 | Staking mechanics (fee split, variable APR, validator stake requirement, unstake penalty) are documented in official blog/docs sources. |
| Shariah Alignment | 45/100 | No explicit Shariah analysis exists in the sources, and the presence of a slashing/penalty mechanism alongside an unresolved contract classification leaves a core question open. |
Summary: Somnia offers native delegated-PoS staking with fee-funded variable rewards and documented mechanics, but its Islamic contract classification is not addressed in the sources.
Overall Assessment: Somnia presents as a genuine, transparently documented infrastructure project with fee-based (non-interest) economics, though centralization, insider vesting, and unresolved staking classification remain open questions for a fuller Shariah determination.
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar