Is 1INCH Halal?

What is 1Inch: 1INCH coin?

The 1 Inch Network is a channel that connects three different decentralized blockchain protocols. The protocol permits the consolidation of liquidity from a variety of decentralized exchanges to facilitate cost-efficient transactions.

1INCH has two primary uses: as a governance token, granting voting rights to the 1INCH DAO, and as a utility token, where it is used to achieve efficiency in 1INCH Liquidity Protocol routing. The token will also be used in the governance of future protocols developed by the 1INCH Network.

Who Invests In 1Inch?

IOSG Ventures

Nima Capital

Pantera Capital

ParaFi Capital

1Inch Technology

The 1inch Protocol is the primary system of the 1inch Network. This protocol uses a routing and discovery algorithm to find the best possible trades within a range of supported decentralized exchanges.

The algorithm compares the size of your transaction to the marketplace depth and can assess which exchange can offer the best price. The protocal then divvies your trade into multiple trades throughout various decentralized exchanges with the least amount of reduction. To illustrate operable liquidity within a trade, 1inch employs private liquidity sources.

Legitimacy Screening of 1INCH

Legitimacy screening ensures that the digital asset is a genuine project and not a scam. 1Inch has a legitimate product, built using blockchain technology and has public roadmap showing its development plans. This gives us the confidence to confirm that 1INCH has an underlying fundamental value, that can be considered as “Mal” under Islamic rulings. Therefore, as a project it has legitimacy in terms of Shariah.

Is 1INCH project aligned with Islamic values?

No, 1INCH does not align with Islamic values, based on the points discussed here and therefore fails project screening. 1Inch is an exchange liquidity pool on Ethereum like Uniswap. The liquidity pool is linked to lending activity which is not in line with Islamic values.

Financial Screening of 1Inch:

Financial screening ensures that the crypto asset meets the financial criteria for Shariah compliance, if it is an equity based token. 1Inch is not backed by any equity, so there is no financial screening required on this coin/ token. Here we would typically look at things like debt to income ratio to ensure borrowing is limited to a tolerable level.

1INCH Token Screening for Shariah Compliance

Token screening is an assessment of the mechanics of the token itself, to see if it is compliant with Islamic rulings. 1INCH platform contributes to the lending activity. It is used as a governance token and a utility token on the platform and based on this the token should be considered haram.

Is Staking 1INCH Halal?       

Staking as a concept is not against Sharia guidelines. It’s simply a set of pre-defined rules used by a crypto project to determine who gets the rights to add to the blockchain. It is important to note that every project has its own specific staking mechanism, so we need to assess the staking details to ensure they are Shariah compliant. And of course the underlying crypto asset itself mush to be halal to start off with. Rewards from staking are gained from trading fees. 1Inch Staking is aligned with Shariah.          

What Does The Muslim Crypto Community Think of 1Inch?           

Sharlife considers 1INCH as a haram cryptocurrency based on the five areas assessed for Shariah complaince screening.

If you know of other academic or scholarly views on this, please add in comments and we will update accordingly. Alternatively, you may want to join our community of Muslims crypto investors and traders, to share, learn and profit from halal digital assets.          

Is 1Inch Halal?         

1INCH is a platform that filters over 33 different liquidity protocols in order to discover the most efficient swap route. With this platform, users can save money and time. Liquidity protocols are also involved in contributing pooling assets to a lending platform such as Aave and Synthetix which are not Shariah compliant. Overall, we consider 1INCH is against Shariah rulings and is a Haram cryptocurrency.

We hope you found this useful. Please view our Halal Crypto List to find suitable digital asset investments, without compromising your Islamic faith.