Not available to buy here. We rate this Doubtful rather than Halal — scholars differ on it — so we don't offer it as a destination. You can still read the full verdict and the evidence behind it.
Is COTI (COTI) Halal or Haram?
SUMMARY
COTI V2 operates as a privacy-preserving Layer 2 on Ethereum with permissible core utilities like gas and native staking. However, the protocol's Treasury includes an opt-in interest-bearing lending feature, and the exact proportion of protocol revenue derived from this non-compliant source is unknown, resulting in a Doubtful verdict.
Verdict by Activity
How you can hold and use COTI
Buy & Hold
While the core Layer 2 network is permissible, the protocol operates an interest-bearing lending feature within its Treasury, and the exact share of revenue derived from this activity is unknown.
Native Network Staking
OptionalUsers run nodes or delegate to secure the L2 network and earn a share of transaction fees and emissions, which is a permissible payment for validation services.
COTI Treasury (Standard)
OptionalDepositors mint tCOTI to earn a share of ecosystem fees and liquidation bounties, which are permissible revenue sources.
Treasury Lending
OptionalThe Treasury allows depositors to lend COTI to other users to earn interest rates, which constitutes Riba.
Shariah Component Breakdown
Shariah Analysis
Infrastructure — where it runs
PassedCOTI V2 operates as a Layer 2 on Ethereum, which is a neutral, general-purpose network.
Application — what it does
CautionThe core business is a privacy-preserving Layer 2 network, but the protocol also operates an interest-bearing lending product within its Treasury.
Asset — what you own
PassedThe primary utility is paying for gas and native PoS network-security staking, which are permissible; the interest-bearing lending feature is an opt-in secondary mechanism.
Property Status (Māl)
PassedThe token is a native protocol position with confirmed lawful utility (gas, staking), ascertainable supply, and established adoption.
Revenue Purity
CautionThe protocol generates permissible revenue from gas and standard treasury fees, but also earns interest from Treasury lending; the exact share of this non-compliant revenue is unknown.
Legitimacy & Security
project audits
PassedAudit and security information was found for the project.
whitepaper
PassedOfficial whitepapers and tokenomics documentation are available and confirm the V2 architecture and Treasury mechanics.
social presence
CautionNot covered by research.
Team & Ecosystem
team background
CautionNot covered by research.
Detailed Shariah Report
Overview
COTI V2 is a privacy-preserving Layer 2 network built on Ethereum that enables confidential smart contracts and transactions. The native COTI token is used to pay for transaction gas fees, stake in decentralized nodes to secure the network, and participate in the protocol's Treasury for governance and rewards.
Why This Verdict
The Shariah compliance of a crypto asset is evaluated across three layers: the underlying infrastructure, the application itself, and the asset's qualification as recognized property. COTI passes the infrastructure layer as it operates on Ethereum, a neutral, general-purpose network. It also qualifies as recognized digital property (Mal) because it is a native protocol position with a confirmed lawful utility, an ascertainable supply, and established adoption. However, the application layer presents significant compliance issues, resulting in a Doubtful verdict for simply buying and holding the token. While the core Layer 2 network generates permissible revenue from gas fees, the protocol also operates an interest-bearing lending feature within its Treasury. Because the exact proportion of protocol revenue derived from this non-compliant lending activity is unknown, holding the token is classified as Doubtful. Beyond holding, the protocol offers several opt-in mechanisms with distinct rulings. Native network staking and standard COTI Treasury deposits (minting tCOTI) are Halal, as they compensate users for securing the network or provide a share of permissible ecosystem and liquidation fees. Conversely, the Treasury Lending feature is strictly Haram, as it allows users to lend COTI to earn interest, which constitutes Riba.
Permissible Aspects
- The core utility of the COTI token for paying network transaction (gas) fees.
- Native network staking, where users run nodes or delegate tokens to secure the Layer 2 network in exchange for a share of transaction fees and emissions.
- Standard deposits into the COTI Treasury to mint tCOTI, which earns a share of permissible ecosystem fees and liquidation bounties.
- The underlying infrastructure, as the protocol operates on Ethereum, a neutral and general-purpose blockchain.
Points of Caution
- !The protocol operates an opt-in Treasury Lending feature where depositors lend COTI to earn interest, which is a direct violation of Shariah principles against Riba.
- !The exact breakdown of protocol revenue between permissible sources (gas and standard treasury fees) and non-compliant sources (lending interest) is not publicly detailed, making it impossible to verify if the Haram revenue falls below acceptable thresholds.
- !The composition and banking arrangements of the project's off-chain treasury are not publicly disclosed, meaning there is potential exposure to conventional interest-bearing accounts.
Purification Note
Because the exact share of the protocol's revenue derived from the Haram Treasury lending feature is unknown, a precise purification calculation for holding the token cannot be determined. If an investor chooses to hold the token despite the Doubtful verdict, they must exercise extreme caution and independently estimate a purification rate for any ecosystem rewards received. Investors must strictly avoid opting into the Treasury Lending feature, as any interest earned from it is Riba and must be entirely donated to charity without expectation of spiritual reward.
BOTTOM LINE
COTI V2 offers a legitimate privacy-preserving Layer 2 network with permissible core utilities like gas payments and network staking. However, the protocol's Treasury includes an interest-bearing lending feature, and the exact amount of revenue the protocol derives from this Riba-based activity is unknown. Consequently, holding the token is considered Doubtful, and investors should consult a qualified Shariah scholar before proceeding.
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 COTI (COTI), 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 COTI a serious project?
Permissible is not the same as good. This is the research behind that second question — what COTI 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 COTI ranks against its peers
The Shariah verdict tells you whether you may own COTI. 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 COTI
COTI V2 operates as a privacy-preserving Layer 2 on Ethereum with permissible core utilities like gas and native staking. However, the protocol's Treasury includes an opt-in interest-bearing lending feature, and the exact proportion of protocol revenue derived from this non-compliant source is unknown, resulting in a Doubtful verdict.
Asked alongside this
Short answers from the ShariaQuant team.
All answersDoubtful means the call is yours
Doubtful means the evidence is genuinely mixed and the decision belongs to you. The free module walks through riba, gharar and maysir so you can weigh it yourself rather than take our word for it.
Both are free. The module includes the community — no card required.