Is NEO Crypto Coin Halal?

In this article we do a complete shariah screening of NEO, the “Chinese Ethereum”  to determine if it is a halal or haram cryptocurrency. The short answer is yes, Muslims may trade and invest in NEO, but have a read and see how you feel about it first.

What is NEO?

NEO is China’s first open-source blockchain platform that simplifies the development of distributed digital economies and digital identities with built-in assets, contracts, and payments. Pioneers Da Hongfei and Erik Zhang aspire to provide a highly efficient, scalable solution that supports a rich variety of programming languages.

In order to compete against the likes of Ethereum and other projects that provide developer-friendly conventions for decentralized protocols in digital economies, NEO also intends to produce technology like quantum-proofness, inter-network operability, and interoperability.

Further details on NEO website

Who Invests In NEO?

Myriad Capital Management

Royal Venture Capital

SEED Venture Capital

Shibumi Crypto Capital Digital Asset Fund

Viking Capital

NEO Technology

A protocol called NeoX is intended to provide the components of consistency in a process that allows for asset exchange and distributed transactions, so it works to guarantee that exchanges execute exactly as they are supposed to.

NEO relies on delegated Byzantine Fault Tolerance (dBFT), which can support up to 10,000 transactions per second. Book-keeping nodes must verify that on-chain contracts are executed by consensus (i.e., Stellar-like mechanisms) through randomly selected validating nodes. For hard forks, dBFT is less complex than traditional consensus mechanisms.

Legitimacy Screening of NEO

Founders Da Hongfei and Erik Zhang hope to create a platform that is more easily scalable, suited for a wide array of programming languages, and compiled in the secure NEO Virtual Machine (NeoVM). This gives us the confidence to confirm that NEO 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 NEO project aligned with Islamic values?

Yes, NEO crypto project does align with Islamic values as it is comparable to Ethereum and should be considered as such. There is nothing against Islamic guidelines with this objective.

Financial Screening of NEO:

Financial screening ensures that the crypto asset meets the financial criteria for Shariah compliance, if it is an equity based token. NEO 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.

NEO Token Screening for Shariah Compliance

Token Type: Native

Token Uses: Payments

NEO supports two native tokens NEO and NeoGas (GAS). Token holders have the right to vote on governance decisions, and holders also receive passive distribution of the network utility token. NEO is a transaction token that both gives legal rights and enables changes to the NEO network over time. GAS is a gas token used for executing software and web apps built on the NEO protocol.

Based on this NEO token itself is considered halal.

Is Staking NEO Halal?       

According to NEO to GAS, stakers can expect to earn 1.61 annual GAS “interest” from holding and staking 100 NEO. We use the term interest lightly as a selected group of consensus nodes, through the BFT algorithm, reach a consensus and consequently generate new blocks. Therefore, the mechanism used by this protocol is in agreement with the Shariah rulings so staking NEO is Halal.

What Does The Muslim Crypto Community Think of NEO?           

Islamic Finance Guru (IFG) believes NEO crypto is a halal cryptocurrency based on its method of Shariah complaince screening.

Marhaba DiFi‘s Shariah governance board also beleives NEO crypto coin is halal.  

Sharlife considers NEO crypto coin 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 NEO crypto coin 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 NEO Crypto Coin Halal?

Yes, NEO crypto coin is Halal as it wants to create an economy that can support applications like decentralized finance, decentralized crowdfunding, and secure digital identity management. None of this is against Shariah guidelines so Muslims may invest, trade and stake NEO.

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