Is Algorand Halal: Is ALGO Halal?
What is Algorand: ALGO?
Algorand is a scalable, secure, and decentralized digital currency and smart contract platform that runs on the Algorand network. Its protocol uses a variation of Proof-of-Stake (PoS) called Pure PoS (PPoS) to secure the network and reach consensus on block production. Unlike other PoS models, PPoS does not reward nor does it put user or validator assets at risk of appropriation.
Algorand seeks to eventually utilize its existing Proof of Stake (PoS) protocol to form the foundation for an on-chain governance system.
Further details can be found on Algorand website.
Who Invests In Algorand?
Arrington XRP Capital
Digital Asset Capital Management
NEO Global Capital
Union Square Ventures
Is Algorand Halal: Is ALGO Halal? We’d Love to Hear Your Thoughts
Sharing the collective wisdom of thousands of Muslim crypto traders and investors.
Algorand allows for a pure proof of stake, where validators are not rewarded and they do not face the threat of losing their stake. It is unreasonable for the minority and impossible for the majority of validators to upset the system as it might result in devaluation of their investments.
Along with with no locking of tokens, a user has their tokens available at any time. Blocks are created in two sections, with the first user selecting 1 token at random and exposing the next block. Subsequently, 1000 tokens are selected at random while holders approve the first user.
Legitimacy Screening of Algorand
Legitimacy screening ensures that the digital asset is a genuine project and not a scam. Algorand has a legitimate product – a Turing Award winner and MIT professor established the Algorand blockchain project. With it, the faster blocks are finalized, the quicker transaction finality happens.
To prevent forks, this platform uses pure proof-of-stake technology. This gives us the confidence to confirm that ALGO 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 Algorand project aligned with Islamic values?
Yes, ALGO does align with Islamic values so it has a big tick as far as the project screening is concerned. Algorand aims to solve the blockchain trilemma, which consists of increasing speed and safety while also achieving decentralization. According to Islamic rules, layer 1 of Ethereum is equivalent to what the Algorand network is.
Financial Screening of ALGO:
Financial screening ensures that the crypto asset meets the financial criteria for Shariah compliance, if it is an equity based token. ALGO 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.
ALGO Token Screening for Shariah Compliance
The distribution of Algos and its allocation are described at the Emission section on its website. The Foundation holds Algos to support the stability of the Algorand blockchain, to incentivize participation, and to support the Algorand community, ecosystem building, and researching technology.
Algo’s enter the community through a number of channels, such as research and development grants, commissions paid to participants, and sales. All of which activities are openly divulged to the Algorand community. Based on this the token could be considered halal.
Is Staking ALGO Halal?
The Algorand blockchain’s native Algo cryptocurrency exists as an incentive to encourage participation in the network and the addition of transactions or state changes. Users stake it in exchange for inflation rewards by signaling their presence in the system as either online or offline.
The new block procurement system implemented by this particular method follows the tenets of the Shariah so ALGO staking is Halal.
What Does The Muslim Crypto Community Think of Algorand?
Shariya Review Bureau, Bahrain has certified Algorand as Sharia compliant.
Sharlife considers ALGO as a halal cryptocurrency based on the five areas assessed for Shariah complaince screening.
Crypto Halal Office for Monitoring and Sharia auditing on cryptocurrency markets thinks Algorand: ALGO is a Halal digital asset based on its Shariah complaince screening.
IFG (Islamic Finance Guru) believes Algorand: ALGO is a halal cryptocurrency based on its method of Shariah complaince screening.
Practical Islamic Finance (PIF) is comfortable about Algorand: ALGO meeting its Shariah 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 Algorand Halal: Is ALGO Halal?
The main function of Algorand stands as a pure store of value, so overall, the Muslim crypto community beleives Algorand: ALGO is Halal and compliant with Shariah rulings. Algorand uses a proof of stake consensus mechanism, which is allowed. The overall ecosystem is deemed neutral. In addition its involvement with DeFi applications is only concerning NFTs at the moments so this is also neutral. Lastly, as stated earlier the Shariya Review Bureau from, Bahrain has also certified Algorand as Sharia compliant.
We hope you found this useful. Please view our Halal Crypto List to find suitable digital asset investments, without compromising your Islamic faith.