Compound
COMP#129COMP is the governance token of Compound, a lending protocol where users earn interest on deposits and pay interest on loans.
Does not clear all 8 Shariah criteria. Needs caution: interest (riba), nature of the asset, and benefit and harm (maslahah). Fails: business model and usage.
- 3 pass
- 3 caution
- 2 fail
Verdict history
- DoubtfulCurrent
First publication
Fundamentals, market picture and news will appear here.
Halal analysis
Can a Muslim hold Compound?8 Shariah criteria
3 pass · 3 caution · 2 failCOMP pays no interest today, but plans agreed in 2024 and proposed in 2025 would share interest-funded reserves with stakers.
Riba is interest or any guaranteed increase on a loan. Compound's reserves come from the interest borrowers pay. Holding COMP does not currently pay holders anything, but in July 2024 Compound agreed to a staking programme distributing 30% of reserves to COMP stakers, and the March 2025 COMP Staker proposal would pay stakers a share of those reserves. Whether it is live was not confirmed. Sharlife, the first authoritative source that rates Compound, marks it Grey; SRB and CryptoUmmah (riba 35.6/100) say COMP holders benefit from interest. The criterion is at the bottom of caution.
COMP has a working governance function, but that function is to run an interest-based lending market.
Mal is property that Islamic law recognises as having value. COMP gives real voting power over Compound's interest-rate models, markets and treasury. But its value rests on governing interest-based lending rather than a permissible service of its own, which CryptoUmmah calls inseparable from interest generation. Sharlife's Grey rating is consistent with caution here.
COMP has no chance-based payout; its main use is governance.
Maysir is gambling: gaining or losing by chance rather than through productive exchange. COMP has no lottery-like feature, and ordinary price swings are not maysir. No concrete gambling mechanism was found, so the criterion is at the maximum; the interest-based business is assessed under riba and business model.
Compound earns from the spread between interest paid by borrowers and interest paid to suppliers.
This criterion asks how the protocol earns. Compound's service is lending at interest: its docs say suppliers earn interest and borrowers pay interest under rate models set by governance, and DefiLlama calls it an algorithmic interest rate protocol, recording about $2.68 million of revenue over the past year. CryptoUmmah finds no identified non-interest revenue, and SRB reaches the same conclusion. Income from a clearly impermissible source is far above the 5% threshold, so the criterion fails.
Supply is fixed at 10 million and code is open, but large holders and timed votes have repeatedly pushed through contested treasury proposals.
Gharar is excessive uncertainty or hidden information. COMP supply is fixed at 10 million and fully circulating, and the protocol code and governance votes are public. The score is lowered within pass for a pattern of concrete governance risk: in July 2024 Proposal 289 moved 499,000 COMP (about $25 million) into a vault controlled by a whale group, passing 682,191 to 633,636 amid warnings of a governance attack; in May 2026 the Foundation converted $52 million of reserves into COMP that arrived in a DAO wallet 58 minutes before a snapshot and supplied the decisive votes for a V4 treasury
programme, which a delegate called a reserve-mandate breach; and in September 2026 a separate $24 million reserve-redirection proposal passed after most support arrived in the final 34 minutes of voting, a lawful but criticised 'timing attack' that exposed gaps in DAO safeguards such as timelocks and guardian multisigs.
COMP's main use is to govern and support an interest-based lending market.
This criterion looks at what the asset is actually used for. COMP is used to vote on interest-rate models, markets and the treasury of Compound, and as collateral in lending markets. Each of these serves interest-based lending, an impermissible main purpose, so the status is fail.
Fully paid spot COMP is widely available and can be held in a self-custody wallet.
This criterion asks whether the asset can be owned in a permissible way. COMP trades spot with full payment and delivery on major exchanges and is an ordinary ERC-20 token that can be withdrawn to a self-custody wallet. Ownership does not depend on derivatives or leverage, so the criterion is at the maximum.
A contested 2024 proposal moved treasury funds to a whale-controlled vault amid governance-attack warnings.
Maslahah weighs benefit against harm. Compound provides open-source financial infrastructure, but its lending is interest-based, which is counted under other criteria. A concrete harm specific to COMP is the July 2024 episode in which a whale group used concentrated votes to move 499,000 COMP from the treasury into its own yield vault, which security researchers flagged as a possible governance attack; it was settled by promising stakers a share of reserves. The criterion is at caution.
How you can use it
Tap a card for the ruling and sourcesBuying COMP with full payment and immediate delivery is widely available, and the tokens can be moved to a self-custody wallet. Spot is acceptable for a DOUBTFUL asset for those who follow the permissive view, but COMP governs an interest-based lending protocol.
No COMP exchange-traded fund was found. A product that holds COMP itself would be judged like spot; its structure would need to be checked.
COMP is a governance token, not a means of payment. Tier-1 bodies such as Indonesia's MUI rule that using cryptocurrency as currency is not permissible.
COMP staking as proposed would pay stakers a share of reserves funded by borrowers' interest; this is not a reward for validation work and fails.
Margin trading in COMP is offered by some exchanges but is never acceptable: it is a deferred exchange with borrowed money and leverage (AAOIFI SS 20).
COMP futures and perpetuals are offered by derivatives exchanges, but futures, perpetuals and options always fail under AAOIFI SS 20: deferred exchange without delivery, usually with leverage.
Lending COMP through exchange or DeFi lending programmes pays depositors interest from borrowers. This is riba.
Yield on COMP, or COMP rewards for supplying and borrowing in Compound markets, comes from or rewards interest-based lending and fails.
Scholars quotes
Penggunaan cryptocurrency sebagai mata uang hukumnya haram, karena mengandung gharar (ketidakjelasan), dharar (bahaya) dan bertentangan dengan Undang-Undang nomor 7 tahun 2011 tentang Mata Uang dan Peraturan Bank Indonesia nomor 17 tahun 2015 tentang Kewajiban Penggunaan Rupiah di Wilayah Negara Kesatuan Republik Indonesia.Sebagaimana mata wang yang lain, mata wang digital hendaklah tidak digunakan sebagai bayaran kepada barangan, perkhidmatan dan aktiviti tidak patuh Syariah seperti pembelian dadah, pelacuran, perjudian dan pendanaan aktiviti keganasan serta penggubahan wang haram.The SAC has also resolved that investment and trading of Digital Assets that fulfil the above requirements and which are traded on Digital Asset Exchange (DAX) registered with SC are permissible.Third: In light of the above and given the significant risks associated with this type of currencies and the instability of their transactions, the Council of the Academy recommends pursuing research and studies on issues affecting its ruling.Bitcoin is a digital currency that does not meet the legal and Sharia criteria that make it a currency subject to the rulings of dealing with official legal currencies recognized internationally.بناءً على ذلك: فلا يجوز شرعًا تداول عملة "البتكوين" والتعامل من خلالها بالبيعِ والشراءِ والإجارةِ وغيرها، بل يُمنع من الاشتراكِ فيها؛ لعدمِ اعتبارِها كوسيطٍ مقبولٍ للتبادلِ من الجهاتِ المخُتصَّةِ، ولِمَا تشتمل عليه من الضررِ الناشئ عن الغررِ والجهالةِ والغشِّ في مَصْرِفها ومِعْيارها وقِيمتها، فضلًا عما تؤدي إليه ممارستُها من مخاطرَ عاليةٍ على الأفراد والدول.According to research and opinion of experts so far, cryptocurrency is not considered ‘ maal ’ (wealth) in Sharia.Muhammadiyah memandang transaksi dan investasi kripto pada dasarnya mubah (boleh) tetapi dengan syarat tertentu.The opinion on this is the same as doing the same with any halal assets such as shares – 1) is permissible, 2) is more debatable and there are differing opinions on short-term trading.Our current position is 'tawaquf'; we can't say it is halal or haram, but we say it is better not to engage in itAs I mentioned at the beginning of this article it is not necessary to substantiate the permissibility of something as long as there are no prohibited factors involved in it or surrounding it.AI-assisted analysis checked against sources. Not a fatwa or investment advice.
Where it trades
Section in preparation
Similar halal assets
Halal verdict, same category
