Is Chainlink Halal: Is LINK Halal?
What is Chainlink?
ChainLink is a decentralized oracle network that serves as a go-between between smart contract platforms and external sources, allowing smart contract platforms to access off-chain data feeds securely.
Chainlink’s decentralized oracle network connects independent smart contract operators to provide a wide variety of decentralized services, such as Price Feeds (financial market data used by a significant portion of the DeFi economy). Enabling the creation and use of dynamic tokenized funds that are fair on-chain and cryptocurrency applications, proof of reserve (providing proof that off-blockchain collateral is backing stablecoins and cryptoassets), the Keeper Network (automated robot services), and a multitude of other features.
Further details can be found on Chainlink website.
Who Invests In Chainlink?
One Block Capital
Is Chainlink Halal: Is LINK Halal? We’d Love to Hear Your Thoughts
Sharing the collective wisdom of thousands of Muslim crypto traders and investors.
Chainlink is not a single monolithic network like a blockchain but instead a system of tools and frameworks for building blockchain-agnostic oracle networks that augment the capabilities of blockchains and layer-two protocols.
Each Chainlink oracle network consists of multiple independent oracle nodes that independently collect information from multiple independent data providers, aggregate it into a single data point, and deliver it across-chain to be used by smart contracts.
Legitimacy Screening of Chainlink
Chainlink has a legitimate product, built using blockchain technology and has public roadmap showing its development plans. Off-Chain Reporting, a relatively new scaling upgrade on the Chainlink Network that decreased gas fees by over 90%, represents the first approach in reaching the goals expressed within the project whitepaper.
This gives us the confidence to confirm that LINK 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 Chainlink project aligned with Islamic values?
Yes, LINK does align with Islamic values so it has a big tick as far as the project screening is concerned. Their suite of features provides extensive support for creating tools for coding and development. Developers can take advantage of the assortment of SDKs, datasets, and other tools available raising no concern with Shariah.
Financial Screening of LINK:
Financial screening ensures that the crypto asset meets the financial criteria for Shariah compliance, if it is an equity based token. LINK 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.
LINK Token Screening for Shariah Compliance
LINK operates as a payment token and work token. As a payment token, LINK is used to pay Chainlink node operators for offering oracle services. As a work token, LINK can be staked by node operators as collateral to provide oracle services. Based on this the token could be considered halal and can be used as a medium of exchange.
Is Staking LINK Halal?
LINK’s staking attribute is optional and specified by smart contract creators needing to use an oracle service. A failure to provide adequate oracle services will result in a node operator’s LINK being deducted. To the extent to which LINK is staked will depend on the willingness of contract creators to make use of nodes without collateral.
This method of proof of stake mechanism satisfies the ruling of Shariah. The stake will be rewarded through the transaction fee system so staking LINK is Halal.
What Does The Muslim Crypto Community Think of Chainlink?
IFG (Islamic Finance Guru) believes Chainlink: LINK is a halal cryptocurrency based on its method of Shariah complaince screening.
Practical Islamic Finance (PIF) is comfortable about Chainlink: LINK meeting its Shariah screening.
Sharlife considers LINK 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 Chainlink: LINK is a Halal digital asset based on its 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 Chainlink Halal: Is LINK Halal?
Chainlink is another giant interoperability ecosystem like Polkadot. It empowers third-party app developers to create custom smart contracts by using a new programming language., so overall, the Muslim crypto community beleives Chainlink: LINK is Halal and compliant with Shariah rulings
We hope you found this useful. Please view our Halal Crypto List to find suitable digital asset investments, without compromising your Islamic faith.