Is Polygon Halal: Is MATIC Halal?

In this article we do a complete Shariah screening of Polygon to determine if MATIC is a halal or haram cryptocurrency. The short answer is yes, Muslims may trade and invest in MATIC, but have a read and see if you are comfortable with our assessment first.

What is Polygon?

Polygon, is a scaling solution designed to provide multiple tools to increase the speed of transactions and reduce the costs and complexities of blockchain networks.

Polygon is a platform designed to help Ethereum scale as far as infrastructure boosts go. Its core component is a modular, flexible framework (Polygon SDK) allowing developers to build and connect Layer-2 infrastructures, like Plasma, Optimistic Rollups, zkRollups, and Validium, as well as standalone short-chains like the project’s flagship product, Matic POS (Proof-of-Stake).

Polygon (previously known as Matic Network) rebranded in February 2021 pivoted towards supporting multiple Layer 2 infrastructure. It will continue to support the Matic POS sidechain and Plasma-based virtual payment system, which currently hosts more than 90 applications.

Further details on Polygon website

Polygon Technology

Polygon’s hybrid POS Plasma commit chains has three layers.

1. Stake and Plasma smart contracts are implemented on Ethereum: Matic Network maintains a set of smart contracts on Ethereum pertaining to the staking and rewards functions on the Proof-of-Stake layer. These contracts are also responsible for delegation management (including validator Shares) and Plasma contracts for MoreVP (including checkpoints Snapshots of sidechain state).
2. Heimdall (Proof-of-Stake layer): The Heimdall layer manages security notifications produced by the Bor package into a Merkle tree. It publishes the Merkle root to the root chain every once in a while.
3. Bor (Block producer layer): Mining host Matics block producer is an entity that aggregates products into blocks. It is an implementation of Geth with special alterations made to the consensus algorithm.

Polygon SDK Polygon began working toward a solution in February 2021 to integrate varieties of Ethereum scaling solutions. At the core of this Layer 2 connective tissue is the Polygon SDK (software development kit), which will serve as a modular, flexible framework for launching any Ethereum scaling technology chain.

Legitimacy Screening of Polygon

Crypto Entrepreneur and Polygon Founder Sandeep Nailwal raised $50 million for a new startup fund dedicated to Web3 companies, emphasizing funding for venture capital interest in the blockchain-powered web. Upon startup, the firm’s first funding round included institutional holdings such as cryptocurrency protocols, exchanges, crypto-focused accounting firms, and venture capital investors. Symbolics invested in blockchain-focused gaming start-ups BlinkMoon, Planet Mojo, and Community Gaming.

The first institutional round raised $450 million from a list of marquee investors that consisted of SoftBank, Tiger Global, Sequoia Capital India, Reddit founder Alexis Ohanian and Kevin O’Leary of Shark Tank fame.

Formerly known as Matic Network, it was THOUGHT up by Jaynti Kanani, Sandeep Nailwal, and Anurag Arjun in 2017, and later by Serbian engineer Mihalio Bjelic in 2018.

This gives us the confidence to confirm that Polygon 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 Polygon project aligned with Islamic values?

Yes, Polygon crypto project does align with Islamic values as it devoted to Web3. Polygon is a decentralised Ethereum scaling platform that empowers developers to construct scalable user-friendly dapps with lower transaction costs while never sacrificing on safety. There is nothing against Islam about such a technology. 

Financial Screening of Polygon:

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

MATIC Token Screening for Shariah Compliance

Token Type: Native

Token Uses: Payments

MATIC main usage is to pay the transactional prices inside the network. The token functions as a fiscal unit that can get you something you like in the network, such as Polygons. This token has a utility that is permissable under Shariah so Polygon’s MATIC token is considered halal.

Is Staking MATIC: Polygon Halal?       

MATIC sidechains enforce consensus using a Proof-of-Stake (PoS) layer in which network participants stake MATIC to participate as validators and earn staking rewards. Computational resources are required for performing various functions on the Polygon Network, including validating blocks and disseminating proofs. MATIC inflation rewards these resource providers by motivating them to reinvest their earnings into security and maintaining network integrity.

As far as we can see this reward system does not contain Riba, Gharar, or Maisir and is therefore halal.

What Does The Muslim Crypto Community Think of MATIC: Polygon?           

Crypto Halal Office for Monitoring and Sharia auditing on cryptocurrency markets thinks Polygon: MATIC coin is a Halal digital asset based on its Shariah complaince screening.

Pratical Islamic Finance (PIF) is comfortable with Polygon: MATIC is a halal investment based on its methodology.

Sharlife considers Polygon: MATIC as a halal 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 Polygon Halal: Is MATIC Crypto Coin Halal?

Yes, Polygon: MATIC crypto coin is Halal as it’s technology allows people to connect and develop Ethereum-compatible projects and blockchains. This is not against Shariah guidelines so Muslims may invest, trade and stake MATIC crypto coin.

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