Announcing Haqq Ethiq: The Islamic Layer of Ethereum

A Foundation for Bringing Islamic Finance Everywhere 
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Over the past several months, our community, developers, and partners have rallied behind a bold and clear vision: scaling HAQQ to reach the next frontier of impact, adoption, and utility.

Today, we are excited to share an important update in that journey.

HAQQ will be launching a new Ethereum layer 2 chain, Haqq Ethiq, rather than migrating our L1 chain. Our L1 will remain active and intact.

Haqq Ethiq expands HAQQ’s mission while keeping our original layer 1 active and integral to our ecosystem. It’s a purpose-built chain for Islamic finance, embedded directly into the heart of Ethereum, the world’s largest and most mature blockchain ecosystem. Haqq Ethiq becomes part of a growing suite of products under the HAQQ umbrella, all working towards: 

• Bringing the $4 trillion Islamic finance market onchain
• Onboarding 2 billion Muslims into decentralized finance
• Introducing an ethical approach to finance that benefits both Web3 and traditional markets worldwide.

Serving Institutions and Scaling Globally

The original proposal to transition to Ethereum L2 was met with overwhelming support from the community. It reflected our shared desire to enhance scalability, unlock deeper liquidity, and strengthen HAQQ’s position within web3’s global ecosystem.

However, ongoing collaboration with our strategic MENA partners reaffirmed the pivotal role of our layer 1. Its sovereignty, customization, and adaptability make it the ideal foundation for institutional-grade use cases, infrastructure deployment, and regulatory-aligned initiatives, particularly within key markets.

In parallel, our ongoing evaluation of user experience, market dynamics, and ecosystem interoperability underscored the importance of expanding into Ethereum. Haqq Ethiq is designed to deliver seamless UX and direct access to Ethereum-native liquidity, further extending the reach of Islamic finance and ethical solutions.

This multichain strategy is an architectural commitment to delivering Islamic finance everywhere it’s needed, without compromise.

IBC Eureka for Seamless L1 ⇆  L2 Communication 

A key enabler of this architecture is IBC Eureka, the upgraded interoperability protocol now connecting Ethereum with the Cosmos ecosystem. By leveraging IBC Eureka, HAQQ’s L1 and L2 chains will operate as a unified environment, preserving composability while dramatically increasing reach. It will allow us to seamlessly transfer assets between our L1 and L2 and enable cross-chain dApps to function natively.

“What we’re doing now is the result of months of collaboration with our partners and community. One layer gives us control, the other gives us reach, and together, they create something powerful. This multichain setup gives us the flexibility to support governments, institutions, and users, all under one unified ecosystem.” - Andrey Kuznetsov, HAQQ's CTO and Co-founder

From Single Chain to Multichain Vision

What began as a single, purpose-driven L1 is now evolving into a broader ecosystem, a suite of interoperable chains united under one mission: to make Islamic finance and halal solutions accessible everywhere.

This dual-layer architecture reflects strategic alignment with our partners and stakeholders and is designed to serve the full spectrum of needs, from grassroots innovation to sovereign-level deployment.

Together, these two chains form a unified ecosystem:

• Layer 1 remains the sovereign base, optimized for institutional use cases and regional adoption.
• Layer 2 introduces a seamless, Ethereum-native experience for optimal liquidity, UX, and global scale.

The launch of Haqq Ethiq is the next step in building a multichain network for Islamic finance, enabling Sharia-compliant financial products to operate natively across different ecosystems, from Ethereum to Cosmos and beyond.

This evolution brings HAQQ closer to becoming a universal infrastructure layer for Islamic finance, allowing users, developers, and institutions to engage with compliant tools no matter where they build or transact.

ISLM & ETH on Haqq Ethiq

As we launch Haqq Ethiq, our Ethereum layer 2, we want to provide clarity on how gas fees will work and how ISLM fits into this expanded multichain vision.

ETH as Native Gas Token for Haqq Ethiq

The Ethereum ecosystem continues to evolve rapidly. As the OP Stack (which Haqq Ethiq is built upon) phases out native support for custom gas tokens, the path for alternative token usage is increasingly shifting to the wallet and application layer, enabled by account abstraction and evolving paymaster infrastructure. This shift is being accelerated by Ethereum’s recent Pectra upgrade, which introduces smart accounts, enhanced L2 performance, and deeper wallet programmability. These changes not only strengthen Haqq Ethiq’s alignment with Ethereum’s long-term architecture but also lay the groundwork for ISLM to become a flexible, gas option as wallet ecosystems adopt the new standards.

By using ETH as the native gas token, Haqq Ethiq enters Optimism’s Superchain as a fully Ethereum-aligned chain, adopting shared standards that ensure full compatibility with wallets, tooling, and infrastructure. This unlocking ecosystem-wide benefits, enabling an intuitive and accessible experience for users and developers from day one, while paving the way for ISLM-based gas payments as account abstraction matures.

Once Haqq Ethiq is live, enabling ISLM as an alternative gas token will be a priority, as ecosystem tooling and wallet support for account abstraction and paymaster services continue to mature. This approach allows us to maintain performance and compatibility while expanding ISLM’s role across both layers of the HAQQ ecosystem.

Important Note:

ISLM currently exists on Ethereum as an ERC-20 token bridged via Axelar. With the launch of Haqq Ethiq and integration of IBC 2.0 Eureka, a new smart contract representation of ISLM will be introduced.

This means there will be two versions of ISLM on Ethereum:

• ISLM (via Axelar): the current ERC-20 token
• ISLM (via Eureka): the new IBC-native token
  
  

Upon launch, Haqq Ethiq will support only the new ISLM representation via Eureka. Users should refrain from bridging the current ISLM ERC-20 version to the new chain when the time comes. Since HAQQ L1 will remain fully active, both versions will continue to be supported, and users will be able to bridge or exchange as needed.

We’ll soon release clear guides and tools to make this transition smooth and easy to follow.

ISLM Utility on Haqq Ethiq

ISLM will be fully accessible on Haqq Ethiq from day one via IBC Eureka. This means ISLM can:

• Seamlessly move between HAQQ L1 and L2
• Be used across L2 dApps, DeFi platforms, and new financial use cases
• Power future tools and experiences grounded in Sharia-compliance  across both ecosystems

The introduction of Haqq Ethiq amplifies ISLM’s reach, utility, and visibility across ecosystems. As HAQQ evolves into a multichain ecosystem, we’re actively exploring new ways to deepen ISLM’s role across both layers. With growing adoption of account abstraction and wallet support for Ethereum’s recent Pectra upgrade, ISLM can (and will) become an alternative gas token on Haqq Ethiq, unlocking new utility while staying true to our mission.

Thank you for being on this journey with us.

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