Islamic Finance Principles Assessment
Riba — Does Yelay involve interest?
Yelay's entire business model is built on aggregating and routing capital into interest-based lending protocols, making riba exposure a structural feature rather than an incidental one. Some reward flows are variable and fee-linked, which softens but does not eliminate the concern. For Muslim investors, this is the protocol's central and most serious Shariah issue.
Assessment: Riba Dominant
Score: 38/100
Our methodology examines 10 criteria to evaluate how well Yelay avoids interest-based mechanisms.
Yelay's revenue derives from fees on yield generated by depositing user and business funds into Aave, Compound, Morpho, Curve, Convex, and similar lending and liquidity protocols, alongside sales of "Infrastructure Credits" paid in USDC. Protocol fees split 50% to node operators and 50% to treasury. Because the underlying yield being aggregated is substantially interest-derived from conventional lending markets, both the treasury's income and the yield ultimately passed to users carry direct riba exposure. This is not third-party misuse of a neutral tool — interest-bearing yield generation is Yelay's stated core function.
Staking rewards blend two sources: a variable, fee-sharing component tied to protocol usage and node performance (which leans toward a more permissible, performance-based structure), and a scheduled "node emissions" component where new YLAY is minted on a fixed timetable and auto-locked for one to four years, with penalties for early unlocking. The emissions schedule and lock/penalty design resemble a fixed, time-based return mechanism more than a profit-share, and because the vaults being staked into ultimately route to interest-bearing venues, the reward stream is not cleanly separable from riba-linked income.
Gharar — How much uncertainty does Yelay involve?
Uncertainty in Yelay is moderated by named leadership and open-source code, but increased by incomplete audit disclosure and sparse decentralization detail. On balance, informational transparency is reasonably strong for an infrastructure project of this type, though gaps remain. The uncertainty here is manageable but not fully resolved.
Assessment: Moderate Gharar (Material Uncertainty)
Score: 58.7/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
Yelay's team is publicly identifiable: Yaroslav Writtle and Michal Uhliarik are named partners at Faculty Group, and Konstantin Zagaynov is listed as Co-Founder with a documented DeFi/RWA background. The project reports backing from UAE-based Ghaf Group following a Faculty Group merger, and maintains multiple public GitHub repositories covering its SDK, lite contracts, and governance contracts. This level of named, traceable leadership and open code materially reduces gharar relative to anonymous or closed-source projects, though independent verification of credentials beyond public profiles remains limited.
Yelay's V2 and V3 smart contracts were audited by ChainSecurity, Hexens, and Trail of Bits — reputable, named firms whose involvement is a genuine positive for reducing technical uncertainty. However, the YLAY token and staking contracts are described only as reviewed by an unnamed "industry-leading" firm, with no specific name disclosed in available documentation; this gap should be named plainly as a gharar concern, since unverifiable audit claims leave users unable to independently confirm the safety of the staking mechanism they are relying on.
Maysir — Does Yelay involve gambling or speculation?
Yelay is not designed as a gambling product; it is yield-generation infrastructure for businesses and users. Some marketing materials reference use cases like gift cards, loyalty points, and even casino-adjacent rewards, but these describe potential integrator applications rather than the protocol's own function. Speculative use of the YLAY token in secondary markets is a separate matter from the protocol's design intent.
Assessment: Moderate Maysir (High Risk)
Score: 51.8/100
Our methodology examines 11 criteria to determine whether Yelay is a gambling instrument or a genuine economic tool.
Yelay's stated purpose is to let businesses embed yield-bearing vaults for stablecoins, ETH, and BTC without building in-house DeFi infrastructure, aggregating strategies across more than 40 integrated protocols. This is a productive, service-oriented function — comparable to yield-routing middleware rather than a wager or zero-sum game. That some marketing examples mention gambling-adjacent loyalty programs reflects potential misuse by third-party integrators, which per consistent principle should not be treated as determinative of the base protocol's own maysir classification.
Weighing genuine utility against speculation: Yelay shows multi-year operating history, over $281 million routed across yield strategies, and documented integrations, suggesting real adoption beyond pure token speculation. Its lock-up and gradual-unlock staking mechanics are explicitly designed to discourage short-term flipping, which cuts against speculative maysir-like trading incentives. Nonetheless, as with any liquid, exchange-listed token, secondary-market price speculation by traders is possible and likely occurs; this trading behavior sits outside the protocol's core design and should be assessed separately from Yelay's own functional purpose.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 80/100 | Named team members (Writtle, Uhliarik, Zagaynov) with public LinkedIn profiles and institutional backing via Faculty Group/Ghaf Group are identified. |
| Fraud & Scam Risk | 60/100 | No hack, exploit, or rug-pull report tied specifically to Yelay appears in the sources, but this is inferred from absence rather than a direct clean bill of health. |
| Use Case Legitimacy | 60/100 | Sources document genuine infrastructure usage (over $281M routed across 35+ strategies) alongside marketing that also lists gambling-adjacent use cases. |
| Ethical Practices | 35/100 | Yelay's own promotional material explicitly lists "casino spins" and gambling-hall rewards as intended applications of its yield infrastructure. |
Summary: Yelay has a named, credentialed core team with institutional backing and no documented fraud or hack history in the sources reviewed.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 30/100 | The base protocol's core business model is aggregating yield by routing funds through interest-based lending markets such as Aave and Compound. |
| Transaction Fees | 60/100 | Fees are split 50% to node operators and 50% retained by the protocol treasury rather than burned or fully redistributed. |
| Treasury Assets | 40/100 (low evidence) | Treasury bucket names (Community Rewards, Team, Reserve) are disclosed, but nothing indicates whether treasury holdings include interest-bearing instruments. |
| Revenue Model | 25/100 | A significant portion of protocol yield/revenue derives from interest-based lending protocol integrations. |
| Transparency | 80/100 | Multiple public documentation pages and GitHub repositories (SDK, lite contracts, governance contracts) are available. |
| Governance | 50/100 | A DefiLlama governance listing exists, but sources provide little detail on how decentralised actual decision-making is. |
| Launch Fairness | 55/100 | Allocation percentages are disclosed but the launch process and any insider pricing advantages are not detailed. |
| Token Distribution | 60/100 | Disclosed distribution shows a majority (67.6%) already circulating, with a comparatively modest 5% team allocation. |
| Speculation/Utility Ratio | 55/100 | Real usage figures support utility, but the balance between speculative trading and functional use is not directly quantified. |
Summary: Yelay is an open-source DeFi yield-aggregation middleware layer that routes funds through numerous third-party protocols and distributes fees between node operators and its own treasury.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 25/100 | A meaningful share of protocol yield comes from interest-bearing lending integrations such as Aave, Compound, and Morpho. |
| Financial Status | 55/100 | The project appears on major trackers with multi-year history and disclosed volume, but detailed financial stability data is missing. |
| Interest Assessment | 20/100 | The protocol's stated native-yield mechanism explicitly draws on lending-protocol interest and reward tokens at the base layer. |
| Audit Quality | 85/100 | Named reputable firms ChainSecurity, Hexens, and Trail of Bits have audited the V2/V3 smart contracts, with reports referenced. |
Summary: The protocol's yield and revenue are substantially tied to interest-bearing lending integrations, and while its V2/V3 contracts have been audited by named reputable firms, detailed financial disclosures remain limited.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 65/100 | YLAY functions as a utility token for staking, Infrastructure Credit purchases, and reward participation rather than a purely speculative meme asset. |
| Governance Rights | 50/100 | Staking is linked to "protocol governance" in the docs, but the specific voting rights and mechanics are not spelled out. |
| Rewards Distribution | 60/100 | Rewards scale with staked sYLAY and protocol fee flow, making them variable, though partly shaped by a scheduled emission component. |
| Speculation Controls | 60/100 | Lock-up options (gradual vs. locked staking, 1-4 year emission locks with deprecation penalties) are designed to discourage short-term speculative exits. |
| Asset Backing | 45/100 | Token value is tied to protocol utility and fee flows rather than any disclosed hard-asset reserve. |
Summary: YLAY is a utility-oriented token with fee-linked and emission-based rewards plus lock-up mechanisms, though it lacks any disclosed hard-asset backing.
5. Staking Mechanism (5 criteria)
| Criterion | Score | Analysis |
|---|
| Mechanism Type | 65/100 | Staking is non-custodial and delegated to chosen nodes, with documented lock periods and unlock options. |
| Islamic Contract Classification | 35/100 | The node-emission reward, with scheduled minting and a penalty for early unlock, resembles a contested structure rather than a clean Mudarabah/Wakalah arrangement. |
| Rewards Structure | 40/100 | Rewards blend variable fee-sharing with a fixed periodic emission schedule and lock-based penalties, mixing performance-based and fixed characteristics. |
| Documentation | 75/100 | Documentation covers staking mechanics, lock periods, node requirements, and slashing in reasonable detail. |
| Shariah Alignment | 30/100 | The combination of interest-sourced underlying yield and a scheduled emission/lock-penalty reward design leaves a core Shariah classification question unresolved. |
Summary: Yelay offers a documented, non-custodial node-delegation staking system with flexible and locked options, but its reward source mixes real fee revenue with scheduled token emissions in a way that leaves its Islamic contract classification unresolved.
Overall Assessment: Yelay appears to be a genuine, professionally run DeFi infrastructure project, but its core reliance on interest-based lending yield and an emission/lock-penalty reward structure raise unresolved Shariah questions that outweigh its otherwise solid transparency and audit practices.
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar