Is Skale Halal: Is SKL Crypto Coin Halal?
In this article we do a complete Shariah screening of Skale to determine if SKL is a halal or haram cryptocurrency. The short answer is yes, Muslims may trade and invest in SKL, but have a read and see if you are comfortable with our assessment first.
What is Skale?
SKALE Network is a Layer 2 technology that uses a sidechain to alleviate congestion on the Ethereum network. SKALE makes it possible for programmers to host and develop decentralized applications while using dedicated elastic sidechains, rather than the Ethereum Network.
The Ethereum development team is researching the next generation of Ethereum, which will make it easier for merchants, developers, and investors to create and execute transactions with greater transparency and faster processing times. As Ethereum moves from the Proof of Work protocol to the more scalable Proof of Stake protocol, SKALE represents a practical approach to scaling on Ethereum, consistent with the projects name.
Users can configure the main and side chainchains of their blockchain environment by defining protocols, the size of the sidechain being used, a virtual machine, the parent blockchain, and the security features that they plan to employ. SKALE Network, therefore, creates a highly scalable infrastructure that is highly interoperable and compatible with the Ethereum platform. As it forms a network of Elastic Sidechains that Dapp developers pay for subscriptions, it forms a Skale Network.
SKALE provides an efficient setting for the performance of dapps with the Ethereum network using sidechains to supply faster transactions and low latency while maintaining high throughput rate.
Further details on Skale website
Is Skale Halal: Is SKL Crypto Coin Halal? We’d Love to Hear Your Thoughts
Sharing the collective wisdom of thousands of Muslim crypto traders and investors.
The core feature of the SKALE Network project is the use of Elastic Sidechains. Elastic Sidechains are independent blockchains that are integrated with the Ethereum platform. Users are able to define elastic side chains, or so-called side chains that have sidechains, to meet specific needs. Devs can adjust the sidechains they choose for Dapps based on their specifications, allowing them to choose the consensus protocols, virtual machines, parent blockchain, and security protocol on the sidechain.
The network is in possession of expanded storage space with built-in connectivity and interchain messaging with Ethereum’s mainnet. SKALE aims to provide these features by utilizing a pooled transaction root network.
Features of the SKALE Network include
- zero-to-near-zero gas fees,
- random node selection,
- frequent node rotation,
- virtualized subnodes,
- containerized validator nodes,
- consensus through asynchronous binary Byzantine agreement (ABBA),
- BLS node monitoring
- Ethereum interoperability.
Legitimacy Screening of Skale
SKALE Alliance launched in 2018, with a founding team consisting of Jack O Holleran and Stan Kladko. Both men have ample knowledge in information security and blockchain.
Holleran has a PhD in artificial intelligence, blockchain technology, and machine learning, while Kladko has nearly two decades of business experience in IT and cryptography fields. Stan Kladko is likewise one of the top contributors to the Ethereum Foundation and Ethereum research.
This gives us the confidence to confirm that Skale 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 Skale project aligned with Islamic values?
Yes, Skale crypto project does align with Islamic values as it is an open source, decentralized network with a “special” architecture that can scale Web3 applications. SKALE blockchains are denoted as “flexible”, application-specific blockchains that operate one layer above the ETH blockchain. There is nothing against Islam about such a technology.
Financial Screening of Skale:
Financial screening ensures that the crypto asset meets the financial criteria for Shariah compliance, if it is an equity based token. Skale 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.
SKL Token Screening for Shariah Compliance
Token Type: ERC-777
Token Uses: Payments, Work
ERC777 is an Ethereum-based token standard that is backward compatible with the more popular ERC20 standard, so Ethereum apps with ERC20 support can also support ERC777 tokens. This new standard builds upon some of the weaknesses of ERC20, such as its inability to use a token to play a function triggered by another contract. One disadvantage of ERC777 standards is that creating a brand-new ERC777 token contract can be expensive on account of gas expenses.
The SKALE Network has the capability of using SKL for both staking and delegation because of functions supported by both ERC777 standard.
ERC-20 tokens are left in delegation blocks that are separate from the smart contracts, unlike SKL. delegators who opt for this system are not required to send the tokens to a separate smart contract. Instead, they can share their secure delegation key with a staking provider and store the tokens in a cold or hot wallet.
This token has a utility that is permissable under Shariah so Skale’s SKL token is considered halal.
Is Staking SKL Halal?
The SKL token is also a tool for investors and stakers for locking their resources on the network and acquiring rewards in return. Stakers and producers earn rewards based on network validation. As far as we can see this reward mehanism does not contain Riba, Gharar, or Maisir and is therefore halal.
What Does The Muslim Crypto Community Think of SKL?
Crypto Halal Office for Monitoring and Sharia auditing on cryptocurrency markets thinks Skale: SKL coin is a Halal digital asset based on its Shariah complaince screening.
Sharlife considers Skale: SKL 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 Skale Halal: Is SKL Crypto Coin Halal?
Yes, Skale: SKL crypto coin is Halal as it is an open source blockchain network with a decentralized “elastic” architecture designed to scale Web3 applications. SKALE blockchains are configurable, application-specific blockchains that exist one layer above the ETH blockchain. This technology is not against Shariah guidelines so Muslims may invest, trade and stake SKL 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.