Is 1INCH (1INCH) Halal or Haram?
SUMMARY
1inch operates a fundamentally permissible DEX aggregator on neutral infrastructure. However, the token is rated Haram because its value accrual and staking subsidies are directly funded by non-compliant interest generated from the DAO's treasury deployments into DeFi lending protocols, following the discontinuation of its organic swap surplus revenue.
Verdict by Activity
How you can hold and use 1INCH
Buy & Hold
The token's value accrual and staking subsidies are directly funded by non-compliant interest generated from the DAO's treasury deployments into DeFi lending protocols.
Unicorn Power Staking
OptionalStakers receive a treasury-funded base APR subsidized by interest from DeFi lending protocols, alongside resolver execution profits.
Shariah Component Breakdown
Shariah Analysis
Infrastructure — where it runs
PassedThe asset operates on neutral, general-purpose blockchains including Ethereum, BNB Chain, Polygon, Arbitrum, Optimism, and Base.
Application — what it does
CautionThe core business of DEX aggregation is permissible, but there is peripheral Riba exposure as the DAO treasury actively deploys funds into interest-bearing DeFi lending protocols.
Asset — what you own
CautionThe token is used for governance and staking, but the staking yield is a mixed source that includes execution profits and treasury-funded subsidies derived from interest-bearing lending protocols.
Property Status (Māl)
PassedThe token is a native protocol position that presently exists on-chain with a fixed ascertainable supply, self-custody transferability, and established genuine lawful use in governance and staking.
Revenue Purity
FailedThe protocol's active revenue is entirely derived from interest-bearing DeFi lending protocols, and because this non-compliant revenue directly funds staking subsidies for token holders, it constitutes impure token-funding revenue exceeding the 33% threshold.
Legitimacy & Security
project audits
PassedSecurity information and audits are identified in the research.
whitepaper
PassedOfficial documentation and tokenomics are available and identified in the research.
social presence
PassedThe project has massive adoption and integration, processing over $300 billion in cumulative volume.
Team & Ecosystem
team background
CautionNot covered by research.
Detailed Shariah Report
Overview
1inch is a decentralized exchange (DEX) aggregator that sources liquidity across various platforms to provide users with optimal trade prices and protection against maximal extractable value (MEV). The 1INCH token is the native governance and utility token of the protocol, representing a native protocol position rather than a redemption claim against an issuer, and allows holders to vote on DAO proposals or stake their tokens for Unicorn Power to earn yield.
Why This Verdict
The Shariah evaluation of 1INCH relies on a three-layer screen: the underlying infrastructure, the asset itself, and the application's revenue model; a failure at any one layer fails the whole asset. At the base layer, the token operates on neutral, general-purpose blockchains like Ethereum and BNB Chain, which is permissible as hosting other people's applications does not taint the native infrastructure. At the asset layer, the token qualifies as recognized digital property (Mal, or wealth) because it is an exclusive, protocol-recognized right of control that presently exists on-chain with a fixed ascertainable supply. It can be held and transferred via self-custody, carries established lawful use in governance, and is treated as wealth by a body of people. However, the asset fails at the application and revenue layer. Simply buying and holding the 1INCH token is rated Haram. Following the discontinuation of its organic swap surplus revenue in June 2023, 100% of the DAO's active revenue is now generated by deploying treasury funds into interest-bearing DeFi lending protocols like Aave and the Maker DAI Savings Rate. Because this non-compliant interest directly funds the token's value accrual and staking subsidies, the token's core financial model is fundamentally compromised by Riba (usury). Furthermore, regarding optional mechanisms, the opt-in Unicorn Power Staking program is also rated Haram. While stakers receive some permissible execution profits from network resolvers, they also receive a treasury-funded base APR that is directly subsidized by the aforementioned DeFi lending interest.
Permissible Aspects
- The core business activity of DEX aggregation, which routes trades to find the best prices and protects against MEV, is a permissible utility.
- The token operates on neutral, general-purpose blockchain infrastructure.
- The token qualifies as recognized digital property with self-custody transferability and a fixed maximum supply.
Points of Caution
- !The 1inch DAO treasury actively deploys its funds into conventional DeFi lending protocols (such as Aave V3 and the DAI Savings Rate) to earn interest, exposing the protocol to Riba.
- !The protocol's organic revenue mechanism (Swap Surplus) was discontinued, leaving interest generation as the sole active revenue source for the DAO.
- !The staking yield is a mixed source; while it includes permissible execution profits from Fusion resolvers, it is heavily subsidized by the treasury's interest-bearing activities.
Purification Note
Not applicable. Because the token's value accrual and staking subsidies are directly funded by non-compliant interest exceeding permissible thresholds, the asset is rated Haram for investment. Purification cannot legitimize holding an asset whose core economic model is fundamentally reliant on Riba.
BOTTOM LINE
While 1inch provides a highly useful and permissible DEX aggregation service on neutral infrastructure, the 1INCH token itself is rated Haram for investment. The protocol's active revenue is now entirely derived from interest-bearing DeFi lending, which directly funds the token's value accrual and staking rewards. Consequently, Muslim investors should avoid holding or staking 1INCH until its economic model shifts away from Riba-based treasury yields, noting that final religious authority rests with a qualified scholar.
How this verdict was reached
This is not an opinion issued by ShariaQuant. It is the output of a documented screening methodology applied to researched facts about 1INCH (1INCH), and every row above states the specific evidence that drove it — so the reasoning can be examined rather than taken on trust.
The framework screens three layers — the infrastructure an asset runs on, the application it serves, and the asset itself — and separately tests whether the token qualifies as recognised property (māl): that it presently exists, has an ascertainable supply, can be held and transferred, and carries a genuine lawful use. A failure at any single layer fails the asset.
Revenue-purity thresholds follow the AAOIFI screening standard: non-compliant income below 5% of revenue is tolerated and purified, while 5% or above fails the screen.
The framework follows published scholarship rather than in-house opinion. Treating a digital asset as a right (ḥaqq) that becomes recognised property (māl) only on stated conditions follows “Is Crypto Halal? The Definitive Shariah Guide to Crypto and Digital Assets” by Mufti Faraz Adam (Amanah Advisors, 2026), which reproduces the conditions identified by Mufti Taqi Usmani. Financial thresholds follow the AAOIFI screening standard. The rulings we track are collected in the fatwa library.
AAOIFI has not reviewed, approved or endorsed this report or ShariaQuant, and no scholar named in our methodology has reviewed this individual verdict. This is analysis, not a fatwa — final religious authority rests with a qualified scholar.
Is 1INCH a serious project?
Permissible is not the same as good. This is the research behind that second question — what 1INCH is actually for, who is paying for it, what is already built, and what would have to go wrong.
Research on the project, not advice on the trade. A high fundamental score is not a recommendation to buy, and it says nothing about whether the asset is permissible — that is the Shariah verdict, and it is free.
How 1INCH ranks against its peers
The Shariah verdict tells you whether you may own 1INCH. This tells you what you would be holding — measured from market data, with no AI judgment in it, and compared only against assets of the same kind.
A ranking of how solid an asset is against its peers, not a forecast of what it will do next and not investment advice. A permissible asset can rank badly, and a badly ranked asset can still rise.
About 1INCH
1inch operates a fundamentally permissible DEX aggregator on neutral infrastructure. However, the token is rated Haram because its value accrual and staking subsidies are directly funded by non-compliant interest generated from the DAO's treasury deployments into DeFi lending protocols, following the discontinuation of its organic swap surplus revenue.
Asked alongside this
Short answers from the ShariaQuant team.
So what do you hold instead?
A haram verdict is a starting point, not an ending. The harder questions are how to exit something you already hold and how to find what does pass. The free module starts there.
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