Islamic Finance Principles Assessment
Riba — Does ZKsync involve interest?
ZKsync's ZK token itself is a governance instrument with no fixed coupon, but the protocol's own marketing highlights "Intraday Repo" as a flagship institutional product explicitly structured around "principal + interest" repayment. This is a network-promoted interest feature, not merely third-party misuse. Muslim investors should treat this as a genuine riba exposure embedded in ZKsync's own product line, warranting caution.
Assessment: Riba Dominant
Score: 49.8/100
Our methodology examines 10 criteria to evaluate how well ZKsync avoids interest-based mechanisms.
ZKsync's revenue comes from sequencer/transaction fees, generating roughly $86.1M gross since 2023 with $30.7M retained as protocol treasury; this fee-based model is not inherently interest-bearing. However, zksync.io's own promotion of "Intraday Repo" as a headline institutional use case — explicitly involving borrower repayment of principal plus interest — means the network's official product marketing, not just independent dApps, incorporates a conventional interest instrument. Separate third-party lending markets (ZeroLend, Nexon Finance, xBank) built atop zkSync add further interest-based activity, but the base-layer promotion of repo lending is the more direct concern.
No native staking mechanism is currently live; a "Token Participation Program" and "permissionless staking frameworks" are described in governance forums as forthcoming, funded by proposed fee-driven buybacks/burns rather than fixed coupons. If implemented as described, rewards would be variable and tied to actual network usage and fee revenue — structurally closer to profit-sharing than riba. However, since custody model, lock-ups, slashing, and reward formulas are undocumented, this remains a proposed rather than operative mechanism, and no definitive riba/non-riba judgment on staking itself can yet be made.
Gharar — How much uncertainty does ZKsync involve?
ZKsync carries moderate uncertainty: the core team and technology are well-documented, but token utility, governance activation, and staking mechanics remain partly aspirational. Verified audits reduce technical ambiguity, while an unresolved major audit finding and incomplete governance rollout increase it. On balance, informed investors face manageable but real uncertainty about how the token's promised utility will materialize.
Assessment: Moderate Gharar (Material Uncertainty)
Score: 54.4/100
Our methodology examines 15 criteria including team transparency, audit quality, and governance.
Legitimacy risk is low: founder Alex Gluchowski is publicly named and quoted on governance matters, and the ZKsync Foundation (Cayman Islands) lists multiple named staff with verifiable LinkedIn histories. Code is open-source via matter-labs/zksync-docs. A May 2025 compromise of official X accounts spread a phishing airdrop link — an external attack, not internal fraud. Several independent dApps built atop zkSync (Gemholic, Kannagi Finance, EraLend) suffered rug pulls or exploits, but per protocol-level judgment this reflects limited ecosystem vetting rather than base-layer deception.
ZKsync's circuits, verifier, and smart contracts were audited by Halborn (January–March and July 2023), and a zksync-contract-v2 component was audited by ScaleBit in February 2024, which flagged an unresolved major issue — a genuine disclosed gharar concern investors should weigh. Tokenomics documentation (21B supply, vesting schedules, allocation splits) is detailed and publicly available. However, key staking parameters (custody, delegation, slashing, reward formula) and the fate of the 29.27% unallocated "Token Assembly" supply remain undefined, leaving material forward-looking uncertainty.
Maysir — Does ZKsync involve gambling or speculation?
ZKsync itself is not designed as a gambling instrument; it is scaling infrastructure with measurable throughput, TVL, and institutional adoption. Speculative trading of ZK on secondary markets is a market behaviour distinct from the protocol's design, and per the judgment principle should not by itself determine the ruling. The immediately-unlocked airdrop does, however, create a design feature that invites short-term speculative flipping.
Assessment: Moderate Maysir (High Risk)
Score: 58/100
Our methodology examines 11 criteria to determine whether ZKsync is a gambling instrument or a genuine economic tool.
ZKsync provides genuine, measurable utility: it is the leading ZK rollup by TVS and proof volume, used for RWA tokenization, institutional "Prividium" chains, payments, DeFi, and gaming, with real partnerships (Deutsche Bank, UBS, WonderFi, Tradable). This productive, revenue-generating infrastructure role — verifiable in on-chain usage and named enterprise deployments — distinguishes ZK from purely speculative instruments whose value derives solely from price betting, since the token underlies actual transaction settlement and scaling demand.
Despite this utility, tokenomics features amplify speculative risk: the 17.5% airdrop allocation unlocked entirely at TGE with no vesting, unlike the multi-year cliff-and-linear-unlock schedule for team and investors, creating an asymmetric incentive for rapid post-airdrop selling and volatility. Combined with a currently non-cashflow-linked token (fees retained, not yet distributed) and pending governance activation, near-term price action is likely driven more by speculative positioning than by realized utility — a pattern investors should weigh even as the underlying infrastructure use case remains genuine.
The Full 27-Point Screening
1. Legitimacy (4 criteria)
| Criterion | Score | Analysis |
|---|
| Team Transparency | 78/100 | Founder and multiple Foundation staff are named and professionally traceable, and the entity structure (Cayman Islands foundation) is disclosed. |
| Fraud & Scam Risk | 68/100 | No fraud by the core team is evidenced; an external hack of official social accounts occurred, and several third-party dApps built on the network were accused of rug pulls, which per the judgment principle does not determine the base protocol's own standing but is worth noting. |
| Use Case Legitimacy | 85/100 | Sources document substantial real-world utility as Ethereum scaling infrastructure with institutional and RWA adoption. |
| Ethical Practices | 55/100 | The base network is general-purpose infrastructure, but it directly markets an interest-bearing "Intraday Repo" settlement product as one of its own flagship use cases, which is a design choice of the protocol itself rather than third-party misuse. |
Summary: ZKsync is built by a publicly identifiable team and foundation with a multi-year operating history, though its surrounding ecosystem has seen third-party rug pulls and a social-media account hack.
2. Project Operations (9 criteria)
| Criterion | Score | Analysis |
|---|
| Core Protocol Business | 55/100 | The core protocol is Ethereum scaling infrastructure, not itself a prohibited sector, though its own promoted institutional product line includes an interest-based repo feature. |
| Transaction Fees | 68/100 | Fees are currently retained as protocol revenue rather than burned, and are standard service/gas fees rather than riba-like extraction; a proposal to add burn mechanics exists but is not yet live. |
| Treasury Assets | 30/100 (low evidence) | The sources give no information on the composition of the treasury's held assets, so interest-bearing exposure cannot be assessed either way. |
| Revenue Model | 60/100 | Revenue comes mainly from network fees and licensing, not from lending interest at the base layer, though the protocol's own repo feature involves interest payments passing through the network. |
| Transparency | 85/100 | Documentation and code repositories are public, and multiple named audit reports are publicly available. |
| Governance | 48/100 | A DAO/Token Assembly governance structure is described, but sources indicate a large token allocation and governance activation remain pending, meaning decentralised control is not yet fully operative. |
| Launch Fairness | 55/100 | The launch combined a large no-vesting airdrop to hundreds of thousands of wallets with a substantial 33%+ insider (team+investor) allocation under multi-year vesting, a mixed but well-documented fairness profile. |
| Token Distribution | 55/100 | Detailed allocation data show a broad airdrop alongside large insider and unallocated governance-controlled buckets, indicating only partial decentralisation of ownership. |
| Speculation/Utility Ratio | 45/100 | Sources explicitly describe the token's utility as historically limited since its 2024 airdrop, with a 2025 proposal specifically aimed at adding utility, indicating speculation had outweighed use. |
Summary: The protocol is a genuine Ethereum-scaling ZK-rollup network with open-source code and a detailed, if partly insider-weighted, token distribution and vesting schedule.
3. Financial Health (4 criteria)
| Criterion | Score | Analysis |
|---|
| Protocol Revenue | 60/100 | Reported revenue derives from fees and licensing rather than interest lending at the base protocol, though the network's own repo product involves interest. |
| Financial Status | 75/100 | Disclosed revenue figures and leading market-share metrics indicate a financially substantial and relatively transparent operation. |
| Interest Assessment | 50/100 | The base protocol does not run a deposit-taking lending market for retail users, but it directly promotes an interest-bearing institutional repo settlement feature as part of its own product suite. |
| Audit Quality | 80/100 | Named firms (Halborn, ScaleBit) conducted dated security assessments with published findings, though the ScaleBit report notes an unresolved major issue. |
Summary: ZKsync shows real, disclosed fee revenue and named security audits, but its own promoted institutional product suite includes an interest-bearing repo settlement feature.
4. Token Economics (5 criteria)
| Criterion | Score | Analysis |
|---|
| Token Purpose | 55/100 | The team explicitly frames ZK as a governance token without equity-like claims, now being redesigned to add fee-linked utility, indicating genuine but still-developing purpose. |
| Governance Rights | 60/100 | Holders are described as having governance rights over fee levels, splits, and staking rules via a DAO structure, though full activation is pending. |
| Rewards Distribution | 55/100 | Proposed rewards would be variable and tied to network fee revenue rather than fixed interest, but the mechanism is not yet live so this cannot be confirmed operationally. |
| Speculation Controls | 45/100 | Vesting schedules restrain insider selling, but the fully unlocked, no-vesting airdrop to the majority of supply increases speculative dumping risk. |
| Asset Backing | 40/100 | No reserve-asset backing is described; token value is intended to derive from governance/utility rather than collateral, which the sources do not contradict. |
Summary: ZK is explicitly a non-equity governance token now being redesigned toward fee-linked utility, with vesting-based but incomplete anti-speculation controls and no asset backing.
5. Staking Mechanism (5 criteria)
| Criterion | Score | Analysis |
|---|
| Mechanism Type | 30/100 (low evidence) | Sources reference staking as "already in motion" but provide no detail on custody model, delegation, or flexibility. |
| Islamic Contract Classification | 30/100 (low evidence) | No source classifies the proposed staking arrangement under any Islamic contract framework, and the mechanics remain undefined. |
| Rewards Structure | 50/100 | Proposed rewards are described as funded by fee-driven token buybacks tied to real usage rather than a fixed rate, but this is not yet operational. |
| Documentation | 25/100 (low evidence) | No documentation of staking terms, risks, or lock-up conditions was found in the sources. |
| Shariah Alignment | 30/100 | With mechanics undefined, a core Shariah question (nature of the reward and any Qard-like guarantee) remains unresolved pending fuller disclosure. |
Summary: A native staking mechanism is described as in development but not yet documented with clear custody, lock-up, or reward terms in the available sources.
Overall Assessment: ZKsync is a substantive, transparent Layer-2 infrastructure project whose Shariah profile is mixed mainly by an interest-linked institutional feature and an as-yet undocumented staking design rather than by any meme or fraud characteristics.
Written by ThanvirFounder, Ex Director S&P Global Energy
Reviewed by Imam Omar SiddiqiShariah Scholar