Zakat on Ethereum
Ethereum has become the second largest cryptocurrency by market capitalization and the foundation for decentralized finance, NFTs, and smart contract applications. Muslim investors holding Ethereum face critical questions about Zakat obligations. Do you pay Zakat on Ethereum you hold in wallets or on exchanges? How do you value ETH when prices fluctuate dramatically? What about staked Ethereum locked in ETH 2.0 validators? Are DeFi yields zakatable? How do you handle gas fees, lost wallet access, fractional ETH amounts, and NFTs purchased with Ethereum? This comprehensive guide answers every question about Zakat on Ethereum with complete Islamic clarity.
The fundamental principle for Zakat on Ethereum is that cryptocurrency meeting the conditions of zakatable wealth is subject to the standard 2.5% annual Zakat rate. Ethereum functions as a liquid tradeable asset similar to currency or gold. When your total wealth including Ethereum market value exceeds nisab and remains above nisab for one complete lunar year, Zakat becomes obligatory on the total including your ETH holdings. This guide explains exactly how Zakat on Ethereum works, how to value volatile prices, staking considerations, exchange versus wallet holdings, DeFi protocols, and the correct Islamic method backed by authentic Quranic and Hadith evidence specifically applied to Ethereum cryptocurrency.
Foundation
Is Ethereum zakatable wealth under Islamic law?
Understanding why Ethereum qualifies as zakatable assets according to Islamic jurisprudence.
Ethereum as digital wealth in Islamic law
Ethereum is a cryptocurrency that exists entirely in digital form on blockchain networks. Unlike physical assets, you cannot hold Ethereum in your hand. However, Islamic scholars examining cryptocurrency have widely concluded that digital assets with real market value and exchangeability qualify as wealth subject to Zakat. Ethereum has established market value traded on major exchanges worldwide, can be exchanged for fiat currencies or other assets, and functions as a store of value and medium of exchange within crypto ecosystems.
The majority scholarly position treats Ethereum similar to gold, silver, or modern currency for Zakat purposes. When you own Ethereum, you possess wealth that has monetary value, can appreciate or depreciate, and is fully tradeable. This makes Ethereum zakatable under the principle that all forms of wealth meeting nisab and hawl conditions are subject to Zakat. The digital nature of Ethereum does not exempt it from Zakat any more than digital bank balances are exempt from Zakat on cash holdings.
Why Ethereum specifically is zakatable
Ethereum meets all criteria that define zakatable wealth in Islamic law. First, full ownership: you control your Ethereum through private keys or exchange accounts. Second, growth potential: Ethereum value can increase, making it productive wealth. Third, exchangeability: you can convert Ethereum to other currencies or assets at will. Fourth, nisab applicability: Ethereum value can be compared to gold or silver nisab thresholds. Fifth, hawl completion: you can hold Ethereum for full lunar years while maintaining ownership. These characteristics make Ethereum unambiguously zakatable wealth under established Islamic jurisprudence on what constitutes zakatable assets.
Ethereum versus Bitcoin for Zakat purposes
While Bitcoin and Ethereum are both zakatable cryptocurrencies, Ethereum has additional complexity due to its smart contract functionality, staking mechanisms, and DeFi ecosystem integration. For basic Zakat calculation, both are treated identically: valued at market price on your Zakat date and included in total zakatable wealth. However, Ethereum introduces questions about staked ETH locked in validators, yields from DeFi lending protocols, NFTs on the Ethereum network, and gas fees in ETH. These complications require specific guidance beyond what applies to simple Bitcoin holdings. Learn more about Bitcoin Zakat in our Zakat on Bitcoin guide.
Valuation
How to value Ethereum for Zakat calculation
Handling price volatility and determining accurate market value on your Zakat date.
Single day valuation on your annual Zakat date
Ethereum price volatility creates confusion for Zakat calculation. ETH might trade at $1,800 in January, $3,200 in May, $2,100 in September, and $2,600 on your Zakat date. Which price do you use? The Islamic principle is straightforward: value all assets at their market price on your single annual Zakat date. Check the Ethereum price in your local currency on your exact Zakat date, multiply by your total ETH amount, and include that value in your Zakat calculation. Price movements during the rest of the year are completely irrelevant.
This single day valuation method applies universally to all fluctuating assets. Gold prices change daily, stock market values shift hourly, and cryptocurrency prices are notoriously volatile. Islamic law does not require averaging, historical analysis, or complex calculations. Simply check the current market value on your chosen Zakat date and use that figure. If Ethereum is $2,400 per ETH on your Zakat date, and you own 5.3 ETH, your Ethereum value is $12,720 for Zakat purposes regardless of what ETH was worth three months earlier or might be worth next week.
Where to check Ethereum price accurately
Use reliable sources for Ethereum market prices. CoinMarketCap and CoinGecko provide accurate aggregate prices from multiple exchanges. Major exchange prices from Coinbase, Binance, Kraken, or Gemini are acceptable. Check the ETH price in your local currency at the exact moment of your Zakat calculation. If you calculate at midnight on 1st Ramadan, use the ETH price at that time. Most exchanges show real time prices or you can check historical price data for your specific Zakat date if calculating retrospectively.
Handling different exchange prices
Ethereum price can vary slightly between exchanges due to liquidity differences and trading volumes. Coinbase might show $2,405 while Binance shows $2,398 for ETH at the same moment. This small variance is acceptable. Use the price from the exchange where you hold your Ethereum if you keep it on exchanges, or use a reliable aggregate price source if you hold ETH in personal wallets. A few dollars difference in price does not materially affect Zakat calculation accuracy.
Fractional Ethereum amounts and precision
Ethereum is divisible to 18 decimal places, and most people own fractional ETH amounts like 0.7 ETH or 3.42 ETH rather than whole numbers. This does not complicate Zakat calculation. Simply multiply your exact ETH amount by the market price. If you own 0.7 ETH and the price is $2,400, your Ethereum value is $1,680. If you own 3.42 ETH at $2,400, your value is $8,208. Include this precise value in your total zakatable wealth calculation. Our Zakat calculator handles fractional cryptocurrency amounts automatically.
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Zakat on staked Ethereum and ETH 2.0 validators
Understanding zakatable status of locked staked ETH and staking rewards.
Is locked staked Ethereum zakatable?
Ethereum transitioned to proof of stake through the Ethereum 2.0 upgrade, allowing holders to stake ETH by locking it in validators to earn rewards. When you stake Ethereum, it becomes locked and inaccessible until withdrawal functionality is enabled, though this has now been implemented with the Shanghai upgrade. The scholarly question for Zakat on staked Ethereum centers on whether temporarily inaccessible wealth is zakatable.
The majority contemporary scholarly position treats staked Ethereum as zakatable even when locked. The reasoning is that you maintain full legal ownership of the staked ETH. The lockup is voluntary and temporary, not permanent confiscation. You will regain full access to your staked ETH plus rewards. This makes staked Ethereum similar to fixed deposits or locked savings accounts, which most scholars consider zakatable despite temporary access restrictions. Include the full value of your staked Ethereum in your Zakat calculation at market price on your Zakat date.
Calculating Zakat on staked ETH with rewards
You staked 10 ETH in an Ethereum validator two years ago when ETH was $1,500. Over time, you accumulated 0.8 ETH in staking rewards. On your current Zakat date, Ethereum trades at $2,400. Your total staked position is 10.8 ETH. For Zakat on Ethereum purposes, value this entire amount: 10.8 ETH × $2,400 = $25,920. Include this $25,920 in your total zakatable wealth calculation. The fact that the ETH is staked does not exempt it from Zakat under the majority position, and the accumulated rewards are also zakatable as they represent growth in your wealth.
Liquid staking derivatives and tokenized staked ETH
Liquid staking protocols like Lido, Rocket Pool, and others provide derivative tokens representing staked Ethereum. When you stake ETH through Lido, you receive stETH tokens representing your staked position. These liquid staking derivatives are fully tradeable and can be exchanged back to ETH or other assets at any time. For Zakat purposes, liquid staking derivatives are unambiguously zakatable because they are not truly locked. You have full liquidity through the derivative token.
Value liquid staking derivatives at their market price on your Zakat date. If you hold 8 stETH and each stETH trades at $2,380 on your Zakat date, your value is 8 × $2,380 = $19,040. Include this in total zakatable wealth. The accumulated staking rewards embedded in the increasing stETH balance are also zakatable. Liquid staking makes Zakat calculation simpler than native staking because there is no lockup question to consider. Learn more about general cryptocurrency Zakat in our Cryptocurrency Zakat guide.
Storage
Zakat on Ethereum in different locations
How holding location affects zakatable status: exchanges, wallets, DeFi protocols.
Ethereum on centralized exchanges
Many Muslims hold Ethereum on centralized exchanges like Coinbase, Binance, Kraken, Gemini, or Crypto.com for convenience and ease of trading. Ethereum held on exchanges is fully zakatable with no exceptions. You have immediate access to sell, withdraw, or trade your ETH. The exchange custodian relationship does not change ownership. You legally own the Ethereum and bear the full risk of price movements and exchange solvency.
On your Zakat date, log into each exchange where you hold Ethereum and check your exact ETH balance. Combine balances from multiple exchanges if you use several platforms. Value the total ETH at current market price and include in your Zakat calculation. If you have 2.5 ETH on Coinbase and 1.8 ETH on Binance for total 4.3 ETH worth $10,320 at $2,400 per ETH, include the full $10,320 in zakatable wealth. Exchange holdings do not reduce or exempt Zakat obligations.
Ethereum in personal wallets
Self custody through wallets like MetaMask, Ledger hardware wallets, Trezor, Trust Wallet, or other Ethereum wallets gives you complete control through private key ownership. Ethereum in personal wallets is zakatable identical to exchange holdings. The fact that you control private keys rather than trusting an exchange does not change Zakat obligations. You own the ETH, can access it immediately, and can trade or transfer it at will.
Check your wallet balances on your Zakat date using blockchain explorers or wallet interfaces. If you use multiple wallets, total all Ethereum holdings across every address you control. Hardware wallet ETH, mobile wallet ETH, browser extension wallet ETH, all must be combined and valued together. Include the complete total in your Zakat calculation at market price. Self custody actually strengthens the Zakat obligation because you have undisputed full ownership and control.
Lost wallet access and forgotten private keys
If you permanently lost access to an Ethereum wallet due to forgotten seed phrase, lost hardware wallet without backup, corrupted wallet file with no recovery, or any other permanent loss scenario, most scholars say that inaccessible Ethereum is not zakatable. The reasoning is that you no longer possess or benefit from it despite technical blockchain ownership. However, if any realistic recovery possibility exists through password recovery services, seed phrase reconstruction attempts, or technical assistance, continue including that Ethereum in zakatable wealth until loss is definitively confirmed as permanent and irreversible.
Ethereum locked in DeFi protocols
Decentralized finance protocols built on Ethereum allow you to lend ETH to earn interest, provide liquidity to decentralized exchanges, deposit ETH as collateral for loans, or participate in yield farming. When your Ethereum is deployed in DeFi protocols like Aave, Compound, Uniswap, or others, it remains your wealth and is zakatable. You can withdraw from most DeFi protocols at any time, and even time locked positions are temporary restrictions on assets you legally own.
For Zakat on Ethereum in DeFi, include the full value of your deployed ETH plus any accumulated rewards or yields. If you deposited 5 ETH in Aave lending pool six months ago and accumulated 0.3 ETH in interest, your total is 5.3 ETH for Zakat purposes. Value this at market price on your Zakat date and include in total wealth. DeFi yields themselves may have additional considerations if they constitute riba according to your understanding of Islamic finance, but the principal Ethereum amount is definitely zakatable. Similar principles apply to other crypto investments explained in our Investments Zakat guide.
Complete Ethereum Zakat calculation
Include all your ETH holdings regardless of location
Exchanges, wallets, staking, DeFi protocols - combine everything for accurate Zakat.
Calculate Total Zakat →Transaction costs
Gas fees and Ethereum transaction expenses
How gas fees paid in ETH affect your zakatable wealth calculations.
Gas fees are not deductible from Zakat
Every Ethereum transaction requires gas fees paid in ETH to compensate validators for processing transactions. These fees can range from a few dollars during low network activity to hundreds of dollars during high congestion. Muslims using Ethereum extensively for DeFi, NFT purchases, or frequent trading may spend significant amounts in gas fees throughout the year. However, gas fees do not reduce your zakatable Ethereum wealth.
Gas fees are transaction costs similar to bank fees, brokerage commissions, or payment processing charges. When you spend ETH on gas, that Ethereum leaves your possession permanently as payment for network services. Your remaining ETH balance after gas expenditures is what counts toward Zakat calculation. You cannot retroactively deduct the year's accumulated gas fees from your current Zakat obligation. Only the actual ETH you currently possess on your Zakat date matters. If you started the year with 10 ETH, spent 0.5 ETH on gas fees, and have 9.5 ETH remaining, you calculate Zakat on the 9.5 ETH current balance, not the original 10 ETH.
Example: Active DeFi user with high gas costs
You actively use Ethereum DeFi protocols and spend approximately 0.8 ETH in gas fees annually for swapping tokens, providing liquidity, claiming rewards, and other on chain activities. Your Zakat date arrives. You currently hold 8.2 ETH in your MetaMask wallet worth $19,680 at $2,400 per ETH. The 0.8 ETH you spent on gas fees throughout the year does not factor into current Zakat calculation. You calculate Zakat on the 8.2 ETH you currently possess, which equals $19,680 value to include in total zakatable wealth. The gas fees already left your possession as legitimate expenses, and past expenses do not reduce present wealth for Zakat purposes.
Failed transactions and wasted gas
Ethereum transactions can fail due to insufficient gas limits, contract errors, or network issues, yet gas fees are still consumed. If you lost 0.2 ETH to failed transactions over the year, this does not create a Zakat deduction. Failed transaction gas is an unfortunate expense similar to any other loss. Only your current ETH balance on your Zakat date determines Zakat obligation. This same principle applies to all cryptocurrency expenses and losses. Learn more in our comprehensive Crypto Zakat guide.
NFTs
NFTs purchased with Ethereum and Zakat implications
Understanding how converting ETH to NFTs affects your zakatable wealth.
Ethereum spent on NFTs leaves your liquid wealth
The Ethereum blockchain hosts the largest NFT ecosystem including digital art, collectibles, gaming assets, virtual real estate, and domain names. When you purchase NFTs with Ethereum, you convert liquid cryptocurrency into illiquid digital assets. The ETH you spent no longer exists in your wallet and is not zakatable. Only the NFT you acquired has potential zakatable status depending on your intention and the NFT type.
For Zakat on Ethereum, the critical moment is when ETH converts to NFTs. If you held 15 ETH and spent 3 ETH buying NFTs, your remaining 12 ETH is zakatable at market value. The 3 ETH is gone from liquid holdings. The NFT purchased has separate Zakat treatment based on whether you bought it for personal enjoyment or investment purposes. Most personal use NFTs like profile pictures, digital art for appreciation, or gaming items for play are not zakatable similar to other personal possessions. However, NFTs purchased explicitly as trading inventory or investment assets are zakatable at their market value.
Personal use NFTs and Zakat
You purchased a Bored Ape NFT for 45 ETH because you appreciate the art and use it as your social media profile picture. This is a personal use NFT similar to buying luxury artwork for your home. Personal use items are not zakatable in Islamic law. The 45 ETH you spent is no longer zakatable because it converted to a personal possession. Only your remaining Ethereum holdings after the purchase remain zakatable. If the NFT later appreciates significantly and you sell it, the ETH proceeds from the sale become zakatable wealth when received.
NFT trading inventory and Zakat
You actively flip NFTs for profit, buying undervalued projects and selling when prices increase. You hold 8 NFTs purchased with total 12 ETH with intention to resell. These NFTs are trading inventory similar to a merchant's stock. On your Zakat date, check the current floor price or market value of each NFT. Total their collective value and include in zakatable wealth. If the 8 NFTs now worth 18 ETH in market value, include $43,200 (at $2,400 per ETH) in your Zakat calculation as trading inventory.
Real scenarios
Detailed Ethereum Zakat calculation examples
Step by step walkthroughs showing exactly how to calculate Zakat on Ethereum holdings.
Simple Ethereum holder with exchange custody
Background: Fatima holds Ethereum on Coinbase as a long term investment. She chose 1st Ramadan as her annual Zakat date. She does not actively trade or use DeFi protocols.
Ethereum holdings: Coinbase account: 6.4 ETH. No other crypto holdings. She purchased most of this ETH two years ago and has held continuously above nisab throughout this period.
On Zakat date (1st Ramadan 1446): She checks Ethereum price: $2,350 per ETH. Her Ethereum value: 6.4 ETH × $2,350 = $15,040. She also has $8,500 in bank savings and $2,800 in gold jewelry above personal use. Total zakatable wealth: $15,040 + $8,500 + $2,800 = $26,340.
Nisab check: Current silver nisab is $425. Her wealth far exceeds this and remained above nisab continuously for the full lunar year.
Zakat calculation: $26,340 × 0.025 = $658.50 Zakat due. Fatima pays $659 to eligible recipients.
Key insight about Zakat on Ethereum: Fatima's Ethereum held on Coinbase is fully zakatable despite exchange custody. She valued it at the exact price on her Zakat date and combined it with other assets for complete calculation. Exchange holdings do not reduce Zakat obligations.
ETH 2.0 staker with accumulated rewards
Background: Ahmed staked 32 ETH in an Ethereum validator when ETH 2.0 launched. He has accumulated staking rewards and wants to understand his Zakat obligations on locked staked Ethereum.
Staking position: Original stake: 32 ETH. Accumulated rewards over two years: 2.4 ETH. Total staked position: 34.4 ETH. The ETH was locked until the Shanghai upgrade but is now technically withdrawable though Ahmed chooses to continue staking.
On his Zakat date: Ethereum price: $2,480 per ETH. Staked ETH value: 34.4 ETH × $2,480 = $85,312. He also holds 1.8 ETH in MetaMask wallet for gas fees and transactions valued at $4,464. Other assets: $22,000 in bank savings, $6,500 in stocks. Total wealth: $118,276.
Zakat calculation: $118,276 × 0.025 = $2,956.90. Ahmed pays $2,957 Zakat.
Key insight about Zakat on Ethereum: Ahmed's staked Ethereum and accumulated rewards are both zakatable under the majority scholarly position. The staking lockup does not exempt wealth from Zakat because he maintains legal ownership and the restriction is temporary. Both the original stake and rewards are valued together at current market price.
DeFi user with liquidity positions and yields
Background: Omar actively participates in Ethereum DeFi. He provides liquidity to Uniswap, lends on Aave, and farms yields across protocols. His Ethereum is distributed across multiple DeFi positions.
DeFi holdings on Zakat date: Uniswap ETH-USDC liquidity pool: 8.5 ETH worth of his position. Aave lending: 5.2 ETH deposited earning interest. Yield farming position: 3.8 ETH. MetaMask wallet: 2.1 ETH for transactions. Total Ethereum across all positions: 19.6 ETH.
Valuation: ETH price: $2,420 per ETH. Total Ethereum value: 19.6 ETH × $2,420 = $47,432. Other crypto assets: $8,200 in stablecoins, $12,500 in other altcoins. Non crypto wealth: $15,800 in savings. Total: $83,932.
Zakat calculation: Nisab is $440. His wealth exceeds nisab significantly. Zakat: $83,932 × 0.025 = $2,098.30. He pays $2,098.
Key insight about Zakat on Ethereum: All of Omar's Ethereum is zakatable regardless of which DeFi protocol holds it. He combined ETH from liquidity pools, lending positions, farming contracts, and his wallet. DeFi deployment does not exempt Ethereum from Zakat. The yields and rewards he earned are also zakatable wealth. Learn more about crypto holdings in our detailed Cryptocurrency guide.
Small Ethereum holder building position
Background: Aisha purchased her first Ethereum six months ago and has been dollar cost averaging small amounts monthly. She wants to know if her modest ETH holdings require Zakat.
Ethereum position: Total accumulated: 0.9 ETH purchased over six months. Average cost basis around $2,100 per ETH. Current holdings: Binance exchange: 0.6 ETH. Coinbase: 0.3 ETH. Total: 0.9 ETH.
On her Zakat date: ETH price: $2,500 per ETH. Her Ethereum value: 0.9 ETH × $2,500 = $2,250. Other wealth: Bank savings: $18,400. Small amount of gold: $1,850. Total wealth: $22,500.
Hawl consideration: Aisha first crossed nisab threshold about four months ago when her total wealth exceeded $450. She has only maintained wealth above nisab for four months, not a full lunar year yet.
Zakat due: None this year. Despite having $22,500 in total wealth, Aisha has not maintained wealth above nisab for one complete lunar year. Her Zakat obligation begins when she completes a full lunar year above nisab, approximately eight months from now.
Key insight about Zakat on Ethereum: Even significant Ethereum holdings do not trigger Zakat immediately. The hawl requirement means wealth must stay above nisab for 354 consecutive days. Aisha will owe Zakat next year if she maintains her wealth above nisab until her hawl completes. Learn about hawl timing in our When to Pay Zakat guide.
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Quran and Sahih Hadith on wealth and Zakat
Authentic textual sources establishing Zakat on all forms of wealth including modern assets like Ethereum.
Quran
Establish prayer and give Zakat
Quran 2:43
Allah commands establishment of prayer and payment of Zakat as fundamental obligations. Zakat applies to all qualifying wealth regardless of form. Ethereum meeting nisab and hawl conditions is subject to this divine command.
Quran
Give from what We provided
Quran 2:110
Believers must give Zakat from provision Allah granted. Ethereum acquired through legitimate means is provision that requires Zakat when conditions are met. The digital nature does not exempt wealth from divine obligation.
Quran
Take charity from their wealth
Quran 9:103
Allah instructs taking Zakat from wealth to purify it. This establishes Zakat on accumulated wealth in possession. Ethereum held in wallets or exchanges qualifies as possessed wealth requiring purification through Zakat.
Quran
Rights of the needy in wealth
Quran 51:19
In the wealth of believers is a right for those in need. Ethereum wealth exceeding nisab for hawl must have Zakat paid from it to fulfill this divine right embedded in all forms of wealth.
Hadith
Islam built on five pillars
Sahih al-Bukhari 8
Prophet Muhammad (peace be upon him) established Zakat as one of five pillars of Islam. This makes Zakat mandatory for Muslims with qualifying wealth in any form including modern digital assets like Ethereum cryptocurrency.
Hadith
No Zakat until wealth completes one year
Sunan Abu Dawud 1573
The Prophet (peace be upon him) clarified wealth must remain in possession for one complete year before Zakat is due. This hawl requirement applies to Ethereum. You must hold ETH above nisab for full lunar year before Zakat becomes obligatory.
Hadith
Zakat is a right in wealth
Sahih al-Bukhari 1395
The Prophet (peace be upon him) taught that Zakat is a right Allah placed in the wealth of the rich for benefit of the poor. Ethereum wealth is subject to this right. Those with significant ETH holdings must recognize Zakat as Allah's right.
Hadith
Warning about withholding Zakat
Sahih Muslim 987a
Severe consequences warned for those who possess zakatable wealth and do not pay Zakat. This emphasizes the serious obligation to calculate and pay Zakat correctly on all accumulated wealth including Ethereum holdings.
Scholarly consensus on new forms of wealth
Islamic scholars have consistently applied Zakat principles to new forms of wealth as they emerged throughout history. When paper currency replaced metal coins, scholars ruled it zakatable. When bank accounts became common, scholars included deposits in Zakat calculation. When stocks and securities developed, scholars addressed their zakatable status. The principle is that any wealth with real value, ownership, and exchangeability is potentially zakatable. Ethereum and other cryptocurrencies follow this established pattern. Contemporary Islamic scholars examining cryptocurrency have widely concluded that digital assets meeting nisab and hawl requirements are subject to Zakat at the standard 2.5% rate. There is scholarly consensus that cryptocurrency is wealth, not merely that scholars are uncertain. The specific treatment of some edge cases like locked staking may have minority opinions, but the general zakatable status of Ethereum is established.
FAQ
Frequently asked questions about Zakat on Ethereum
Direct answers to the most common questions Muslims have about Ethereum Zakat.
Do I pay Zakat on Ethereum cryptocurrency I hold?▾
Yes. Ethereum qualifies as zakatable wealth when it meets the conditions. If your total zakatable wealth including Ethereum value exceeds nisab and remains above nisab for one complete lunar year, you owe Zakat on all your wealth including the market value of your Ethereum holdings. Ethereum is treated as a liquid tradeable asset similar to gold or currency.
How do I value Ethereum for Zakat when the price is volatile?▾
Value your Ethereum at the market price on your exact Zakat date. Check the USD, GBP, or your local currency price of ETH on your chosen annual Zakat date. Multiply your total ETH amount by that day's price. Even if Ethereum price fluctuates significantly during the year, you only use the price on your single annual Zakat calculation date.
Do I pay Zakat on staked Ethereum and ETH 2.0 staking rewards?▾
Yes for most scholars. Staked Ethereum locked in ETH 2.0 validators is still your wealth even if temporarily inaccessible. The majority scholarly position treats locked staked ETH as zakatable because you legally own it and will regain access. Staking rewards that accumulate also become part of your zakatable wealth when they enter your possession or when accessible.
Is Zakat due on Ethereum held on exchanges like Coinbase or Binance?▾
Yes. Ethereum held on centralized exchanges like Coinbase, Binance, Kraken, or Gemini is fully zakatable. You have immediate access to withdraw, sell, or trade it. Include the total ETH amount on exchanges in your Zakat calculation valued at market price on your Zakat date. Exchange custody does not exempt Ethereum from Zakat obligation.
What if I lost access to my Ethereum wallet or forgot my private keys?▾
If you permanently lost access with no possibility of recovery, most scholars say that Ethereum is no longer zakatable because you cannot possess or benefit from it. However, if there is any realistic possibility of recovery through seed phrase reconstruction, password recovery, or technical assistance, include it in zakatable wealth until access is definitively impossible.
Do I pay Zakat on fractional Ethereum amounts like 0.5 ETH or 0.1 ETH?▾
Yes, if your total wealth exceeds nisab. Zakat is calculated on total wealth, not individual assets. If you own 0.3 ETH worth $600 plus $10,000 in other assets, your total wealth is $10,600. Compare this total to nisab threshold. If above nisab for full lunar year, calculate 2.5% Zakat on the entire $10,600 including the fractional Ethereum value.
How do I handle Ethereum DeFi yield and liquidity pool rewards for Zakat?▾
DeFi yields from Ethereum based protocols become zakatable when you can access them. Interest-like rewards from lending protocols are zakatable income but may have additional considerations if considered riba. Liquidity pool rewards, yield farming returns, and governance token airdrops become zakatable wealth when claimable. Include their market value in your annual Zakat calculation.
Do gas fees paid in ETH reduce my zakatable Ethereum amount?▾
No. Gas fees are transaction costs, not deductions that reduce zakatable wealth. When you spend ETH on gas fees for transactions, that ETH leaves your possession permanently. Your remaining ETH balance after gas fee expenditures is what counts toward zakatable wealth. You do not retroactively deduct past year's gas fees from current Zakat calculation.
Are NFTs purchased with Ethereum zakatable as assets?▾
NFTs have different treatment depending on intention. NFTs purchased for personal enjoyment or collection are generally not zakatable similar to personal use items. NFTs purchased explicitly for trading profit or investment appreciation are zakatable as trading inventory at market value. The Ethereum spent to buy NFTs is no longer zakatable once converted to NFTs. Only the current NFT value matters.
What is the Zakat rate on Ethereum cryptocurrency?▾
The Zakat rate on Ethereum is 2.5%, the same standard rate that applies to currency, gold, silver, and general wealth. If your Ethereum plus other zakatable assets total $20,000 on your Zakat date after being above nisab for one full lunar year, your Zakat is $20,000 × 0.025 = $500. This 2.5% rate is established from authentic Hadith and scholarly consensus.
Implementation
Practical tips for managing Zakat on Ethereum
Make your annual Ethereum Zakat calculation simple and accurate with these strategies.
1. Track all Ethereum locations
Create a master list of every location where you hold Ethereum. List each exchange account, every wallet address you control, staking positions, DeFi protocol deposits, and any other ETH locations. On your Zakat date, check the balance at each location and total everything. Missing even one wallet or exchange account will understate your zakatable wealth and result in incorrect Zakat calculation.
2. Use reliable price sources
Check Ethereum price from reputable aggregators like CoinMarketCap or CoinGecko, or use major exchange prices from Coinbase, Binance, or Kraken. Record the exact price and timestamp you used for your Zakat calculation. This documentation helps if you need to verify your calculation later or explain your valuation method to scholars.
3. Convert to your local currency
Calculate Ethereum value in your local currency for easier integration with other assets. If you live in the US, convert ETH to USD. UK residents convert to GBP. This allows you to combine Ethereum with bank savings, gold, investments, and other assets denominated in your local currency. Our calculators handle this conversion automatically based on your selected currency.
4. Include staking and DeFi positions
Do not forget Ethereum deployed in staking or DeFi protocols. Check your validator balances, liquid staking token amounts, DeFi lending positions, liquidity pool holdings, and yield farming contracts. All of this Ethereum is zakatable and must be valued and included. Use blockchain explorers or protocol interfaces to verify exact amounts on your Zakat date.
5. Combine with other cryptocurrencies
If you hold Bitcoin, stablecoins, altcoins, or other cryptocurrencies besides Ethereum, value all crypto holdings together. Total your entire cryptocurrency portfolio at market prices on your Zakat date. Then combine this total crypto value with your non crypto assets for complete Zakat calculation. Learn about other crypto in our Bitcoin and general Crypto guides.
6. Set annual reminders
Choose one date on the Islamic calendar for annual Zakat calculation and set recurring reminders. Many Muslims use 1st Ramadan or 15th Shaban. Set a reminder one month before to gather exchange statements, check wallet balances, and prepare for calculation. Consistent annual timing makes Zakat calculation routine and reduces the chance of missing your obligation.
The essential principle for Zakat on Ethereum
Ethereum is zakatable wealth identical to gold, currency, or any liquid asset. Value your total Ethereum holdings at market price on your single annual Zakat date. Include ETH from all locations: exchanges, wallets, staking, DeFi. Combine Ethereum value with your other zakatable assets. If the total exceeds nisab and remained above nisab for one full lunar year, calculate and pay 2.5% Zakat. This straightforward method fulfills your Islamic obligation on modern digital wealth using principles established 1400 years ago.
Ready to fulfill your obligation
Calculate your Zakat on Ethereum and all zakatable wealth
Value your Ethereum holdings at current market price, combine with bank savings, gold, investments, and other cryptocurrencies. Compare total to nisab threshold. If you maintained wealth above nisab for one complete lunar year, calculate and pay 2.5% Zakat. Our calculator makes this process simple with automatic price fetching and currency conversion.
Related cryptocurrency and asset guides
Disclaimer: This guide provides general educational information about Zakat on Ethereum based on widely accepted Islamic scholarly opinions and jurisprudential principles from the four major schools of Islamic law. Individual circumstances vary significantly based on the amount of Ethereum held, whether ETH is staked or locked, DeFi protocol usage, NFT holdings, gas fee expenses, wallet versus exchange custody, interaction with other cryptocurrencies, total wealth levels, debt obligations, and personal financial situations. For questions about complex staking arrangements, DeFi protocol yields that may involve riba, NFT trading as business inventory, cross chain bridged assets, lost wallet recovery possibilities, or edge cases involving technical blockchain complications, consult qualified Islamic scholars who understand both Islamic commercial law and blockchain technology. This guide is designed to help the majority of Muslim Ethereum holders understand and fulfill their Zakat obligations correctly using established Islamic jurisprudence applied to cryptocurrency, a modern form of digital wealth that shares characteristics with currency, commodities, and financial assets that have been subject to Zakat for over 1400 years.
About this Content
Written by the Zakat Finance editorial team. All content is based on authentic Islamic scholarship and is reviewed regularly to ensure accuracy. The content aims to provide guidance on Zakat calculation and does not replace advice from a qualified Islamic scholar.
Last updated: February 2026
Method note: We present common scholarly approaches to Zakat calculation, encouraging consultation with trusted scholars for personal cases.