HCS Score
62/100
These are absolute prohibitions in Islamic finance. If any red line is triggered, the asset is automatically classified as HARAM.
Riba Exposure
Not an interest-based lending or borrowing protocol
Gambling / Betting
No gambling or betting mechanism
Haram Industry
Not involved in haram industry
The asset is scored across 7 Shariah principles.
Based on Red Line Screening and HCS Scoring.
Halal with Concerns
This cryptocurrency is evaluated as Halal with Concerns because certain financial, structural, or speculative risks remain within the CoinStudy HCS framework.
Explanation
This asset demonstrates moderate alignment with Sharia principles, though certain financial or structural concerns remain.
Reviewed by
CoinStudy Shariah Board
Pudgy Penguins managed something unusual in the crypto world — it turned a collection of cartoon penguin images into a genuinely recognizable brand.
During the NFT boom of 2021, Pudgy Penguins emerged as one of the most popular NFT collections. When the NFT market crashed in 2022 and most collections collapsed to near zero, Pudgy Penguins survived, pivoted, and eventually launched PENGU — a cryptocurrency token connected to the broader Pudgy Penguins ecosystem of digital collectibles, merchandise, community engagement, and brand development.
That survival story is genuinely impressive. But for Muslim investors, what matters is what the ecosystem actually is and whether participating in it is permissible.
We ran PENGU through the full CoinStudy Halal Crypto Standard (HCS) methodology. Here's the complete picture.
Pudgy Penguins passes the CoinStudy HCS Sharia red-line screening with no violations. But it scores only 62 out of 100 and is classified as Halal With Concerns — at the lower end of the Halal With Concerns range, just above the Doubtful threshold.
The ecosystem passes the prohibitions. But the scores across Gharar, Maysir, Underlying Business Activity, and Utility are all significantly below most halal-rated projects in our series — reflecting the real limitations of an NFT-based brand ecosystem measured against infrastructure-focused blockchain projects.
Pudgy Penguins began as a collection of 8,888 blockchain-based digital collectibles — cartoon penguin images with varying traits — and expanded into a broader digital brand ecosystem.
The project now includes NFT collectibles, community engagement initiatives, digital branding, merchandise, entertainment content, licensing opportunities, and the PENGU token for ecosystem participation.
The team's strategy has been to build Pudgy Penguins beyond the NFT market into mainstream consumer culture — licensing the IP for physical toys sold at Walmart, building brand recognition through media and entertainment, and creating a community that extends beyond crypto-native collectors.
PENGU tokens support participation and engagement across this broader ecosystem.
Pudgy Penguins' pivot from pure NFT collection to brand ecosystem is genuine and strategically interesting. The Walmart toy licensing deal was real. The merchandise sales are real. The brand recognition has expanded beyond the crypto community in measurable ways.
This brand development strategy is the primary reason PENGU scores higher than projects like PEPE or MemeCore on Underlying Business Activity — it represents an attempt to create genuine commercial value beyond speculative NFT markets.
But genuine is different from sufficient. A Underlying Business Activity score of 7 out of 15 reflects that while brand development and merchandise licensing are permissible activities, they remain relatively limited in scale and heavily dependent on maintaining the cultural relevance of what is still fundamentally an internet meme character — with all the uncertainty that entails.
Understanding the NFT market context is important for evaluating PENGU honestly.
NFT markets operate on a fundamentally different dynamic from most productive economic activities. An NFT's value isn't determined by the income it generates, the service it provides, or the problem it solves. It's determined almost entirely by what the next buyer is willing to pay — which is a function of community enthusiasm, cultural relevance, and speculative demand.
This creates a market structure where the question isn't "what is this genuinely worth?" but "will enough people believe this is worth more tomorrow than it is today?" That speculative dynamic — more pronounced in NFT markets than in most other asset categories — is directly reflected in the Gharar score of 8 out of 15 and the Maysir score of 7 out of 15.
Pudgy Penguins is not built around lending markets, borrowing services, savings products, interest-bearing accounts, or debt-based financial systems. The ecosystem revolves around digital collectibles, community participation, branding, and merchandise.
At the protocol level PENGU is free from Riba. The score of 23 out of 25 on Financial Exposure Risk reflects this clean financial structure with a small deduction for indirect ecosystem exposure.
This is one of the most substantial concerns for PENGU. The score of 8 out of 15 reflects that NFT valuations involve a level of fundamental uncertainty that goes well beyond normal investment uncertainty.
NFT prices fluctuate based on social media trends, influencer attention, market sentiment, community excitement, and viral popularity — factors that are genuinely impossible to evaluate using conventional analytical frameworks. Whether Pudgy Penguins remains culturally relevant enough for PENGU to maintain value is a question that cannot be answered through any rigorous analysis. It depends on factors — internet culture trends, community enthusiasm, brand momentum — that are inherently unpredictable.
This isn't the same as saying "the future is uncertain" about a blockchain infrastructure project. It's saying that the primary value driver — cultural relevance of a cartoon penguin brand — has no measurable fundamental underpinning.
PENGU scores 7 out of 15 on Maysir — one of the lower scores in our analysis series. A significant portion of activity in the Pudgy Penguins and broader NFT ecosystem is driven by speculation, hype cycles, social media attention, fear of missing out, and short-term trading behavior.
NFT market participation often resembles a system where early participants profit when later participants arrive — driven not by utility creation but by maintaining community enthusiasm and cultural momentum. That dynamic has structural similarities to gambling-like financial behavior even when the specific mechanics aren't identical to gambling.
Pudgy Penguins clears every hard red line.
Riba Exposure — ✅ Passed. Not a lending or interest-based protocol.
Gambling and Betting — ✅ Passed. No explicit gambling mechanism exists.
Haram Industry — ✅ Passed. Digital collectibles and brand merchandise are not prohibited industries.
Guaranteed Interest — ✅ Passed. No guaranteed interest obligations.
Synthetic Interest Products — ✅ Passed. No synthetic interest instruments.
No red line violations were found. Pudgy Penguins is eligible for HCS scoring.
Pudgy Penguins is scored across 7 Shariah principles with a total of 100 points.
On Financial Exposure Risk, weighted at 25%, PENGU scores 23 out of 25. Clean financial structure without lending or yield products. Small deduction for indirect ecosystem exposure.
On Gharar and Uncertainty, weighted at 15%, PENGU scores 8 out of 15. Significant uncertainty about long-term value drivers rooted in cultural relevance of an internet brand rather than measurable economic fundamentals. This is one of the weaker scores in our analysis series.
On Maysir and Speculation, weighted at 15%, PENGU scores 7 out of 15. Elevated speculative trading and hype-driven market behavior characteristic of NFT ecosystems. The profit dynamics of the broader NFT market have structural features that raise Maysir concerns.
On Underlying Business Activity, weighted at 15%, PENGU scores 7 out of 15. Brand development, merchandise licensing, and digital collectibles are permissible activities. But the scale remains limited and heavily dependent on maintaining cultural relevance — a fragile foundation for long-term business activity compared to infrastructure projects providing essential services.
On Utility and Real Use, weighted at 10%, PENGU scores 5 out of 10. Genuine utility through brand merchandise and community engagement — but limited in scale and scope relative to most other projects in our analysis. The utility is real but modest.
On Tokenomics Fairness, weighted at 10%, PENGU scores 6 out of 10. Token distribution concerns around initial allocations and the relationship between NFT holders and token holders. The concentration of early distribution creates fairness questions.
On Transparency and Governance, weighted at 10%, PENGU scores 6 out of 10. Governance is still developing. Transparency around ecosystem decisions and token utility is improving but limited compared to more established projects with formal governance structures.
Overall HCS Score: 62 out of 100 — Halal With Concerns
A score of 62 places PENGU at the lower boundary of the Halal With Concerns classification — just above the Doubtful threshold of 60. This is meaningfully different from Halal With Concerns projects that score 75-79.
The Islamic guidance on concerns — to exercise caution with matters that raise doubts when clearer alternatives exist — applies with particular force at this score level. With so many clearly halal-rated options in our analysis series scoring 80+, a score of 62 with the specific concerns identified gives Muslim investors little compelling reason to engage.
The project isn't haram. But the combination of elevated Gharar, elevated Maysir, limited genuine utility, and weak governance means Muslim investors should approach PENGU with substantially more scrutiny and caution than most other projects in our series.
Muslim investors can now compare several projects from the entertainment and cultural token category:
PEPE — 54/100, Doubtful. Pure meme token, virtually no utility, near-Haram. Shiba Inu — 59/100, Doubtful. Meme token with attempted ecosystem development. Pudgy Penguins — 62/100, Halal With Concerns. Brand development with real merchandise and licensing creates some genuine business activity beyond pure meme speculation.
The progression shows that genuine brand development — even if built on an internet meme — creates more legitimate business activity than pure token speculation. Pudgy Penguins scores higher than PEPE and SHIB precisely because the team has made real efforts to create tangible commercial value through merchandise, licensing, and brand development.
But a score of 62 reflects that those efforts, while real, still fall far short of the genuine productive economic activity that characterizes halal-rated infrastructure and service projects.
Before investing in PENGU or any NFT ecosystem token, ask yourself honestly:
Can I clearly articulate what genuine economic value Pudgy Penguins creates beyond brand recognition and community enthusiasm? Am I investing based on conviction in the long-term value of the brand — or following NFT market cycles and cultural trends? Do I understand that cultural relevance is an inherently uncertain foundation for investment value? Is my position size appropriate for a project scoring 62 with significant Gharar and Maysir concerns? Would I be comfortable explaining this investment to a qualified Islamic scholar in terms of what productive economic activity it represents?
Pudgy Penguins (PENGU) is classified as Halal With Concerns under the CoinStudy Halal Crypto Standard with a score of 62 out of 100.
It passes all Sharia red-line checks — there is no direct involvement in interest, gambling as formally defined, or prohibited industries. The brand development and merchandise initiatives represent genuinely permissible commercial activities.
But significant concerns remain across Gharar, Maysir, Underlying Business Activity, Utility, and Governance. A score of 62 at the lower boundary of Halal With Concerns reflects that while not prohibited, PENGU carries more unresolved concerns than almost any other project classified as halal in our analysis.
For Muslim investors — the Islamic guidance to leave doubtful matters for those that are clear applies here. With numerous clearly halal-rated options scoring 80+ in our series, PENGU's combination of elevated speculation, limited genuine utility, and cultural relevance-dependent value gives Muslim investors little compelling reason to engage when better-established halal alternatives exist.
Disclaimer: This analysis is provided for educational and research purposes only. This analysis is based on guidance from CoinStudy's HCS Shariah Board members. CoinStudy does not issue personal fatwas or financial advice. Please consult a qualified Islamic scholar for individual guidance.
Guaranteed Interest
No guaranteed interest obligations
Synthetic Interest Products
No synthetic interest instruments
No Red Line Violations
This asset passed all Sharia red line checks.
Financial Exposure Risk
25%Indirect financial exposure to interest-based & yield products
Gharar / Uncertainty
15%Clarity in contracts and absence of excessive uncertainty
Maysir / Speculation
15%No gambling-like mechanics or high speculation design
Underlying Business Activity
15%The nature of the project's core business is permissible
Utility / Real Use
10%Genuine utility and real economic value
Tokenomics Fairness
10%Fair distribution, no exploitation, sustainable tokenomics
Transparency & Governance
10%Open-source, audited, clear governance structure
