Assalamu alaikum brothers, I saw that you asked a question a long time ago about whether cryptocurrency is halal if it is halal in itself, a halal utility, but there is interest-based staking in the ecosystem (not PoS). Have you found out if these kinds of projects are halal, because I’m already avoiding them, and there are many of them, which makes trading difficult for me with low market cap tokens.
I do not want to misquote them, so please feel free to double check but my understanding is that they are both of the opinion that the halal/haram status depends on the coin’s use case, utility, transparency etc.
Staking on networks where tokens support forbidden activities (gambling, interest-based lending) is haram, while staking on ethical, utility-based projects is halal.
If part of the staking rewards are generated from interest for example, then that would be haram. However islamic finance applies thresholds for % income from haram activities which we also use as part of our screening methodology, but its not always easily established so some degree of ambiuity and may be best avoided in such cases.
Where staking rewards are clearly from effort such as validating network then they are halal.
As for the staking impact on price, the same Islamic finance principles are applied so its best to see a complete shariah assessment, before investment decisions.
Walaikum salam.
This market is evolving and so is our knowledge so what someone may have said a long while ago may be very different now. Without knowing your reference I cant really comment on historic views, but the short answer to your question based on my understanding is, yes.
You can invest in tokens, where only the staking part is haram, but the coin/ project itself is halal. Your transaction in this case is permissable as you are not staking. Buying, selling, holding a halal asset is acceptable as it would be a halal/ permissable transaction.
Having said that for cautious investors its always recommended to go with projects that are more halal than less so. Our latest screening method has a section purely for staking so you can see exactly what projects to avoid.
Hope this helps
I am interested in whether Seikh Dr. Farukh Habib or Mufti Faraz Adam also said this, because I learned a lot from them?
Second part of question:
And what if a part of the purchase of services with a token, a part of the token goes to the stackers as interest, or what if a part of the trading fees on dex is given to the stackers?
Likewise, staking can have a positive or negative effect on the price to some extent, what about that?
As far as I understand, if a project has a part of haram activities in the ecosystem from which they earn income, like a service, product, protocol… if the haram part is in the majority and prevails in %, then it is better to stay away from such cryptocurrencies?
The second part for staking, if part of the income from haram activities in the ecosystem, like some of the ones listed above, goes to staking with interest, then such a cryptocurrency should also be avoided?
And if staking based on interest affects the price too much, because it can cause stronger inflation, if they issue interest through printing new tokens, then such cryptocurrencies should be avoided?
If you are not sure about the answer, I would like you to forward this to the sheikhs, because I have no contact anywhere, and I have been looking.
This is important for smaller market cap projects so that we can analyze it themselves, because they are not on halal screeners.