In this article we do a complete Shariah screening of Solana to determine if SOL is a halal or haram cryptocurrency. The short answer is yes, Muslims may trade and invest in SOL, but have a read and see if you are comfortable with our assessment first.
What is Solana?
Solana’s blockchain protocol is intended to optimize for scaling, and its goal is to provide a platform that enables developers to create decentralized applications (dApps) without depending on scalability bottlenecks. Solana features a new timestamp system known as Proof-of-History (PoH), allowing for automatically ordered transactions.
It uses a Proof of Stake consensus algorithm to ensure network security. Other design goals include sub-second settlement times, low transaction costs, and supports for all LLVM-compatible smart contracts.
Bitcoin and Ethereum, can process roughly 10 transactions per second (TPS). Practical Byzantine Fault Tolerance (PBFT) Proof of Stake (PoS) systems, such as Tendermint, can process about 1,000 TPS with 100 200 nodes. Solana, a PBFT-like PoS blockchain-based system, will increase the TPS up to a maximum of 50,000, making it one of the fastest in the world, with roughly 200 nodes.
Further details on Solana website
Who Invests In Solana?
NEO Global Capital
Zee Prime Capital
Is Solana Halal: Is SOL Crypto Coin Halal? We’d Love to Hear Your Thoughts
Sharing the collective wisdom of thousands of Muslim crypto traders and investors.
In order to create a decentralized, permissionless network that matches the performance of a single node, the Solana team developed 8 key technologies:
- Proof of History (POH) — a clock before consensus;
- Tower BFT — a PoH-optimized version of PBFT;
- Turbine — a block propagation protocol;
- Gulf Stream — Mempool-less transaction forwarding protocol;
- Sealevel — Parallel smart contracts run-time;
- Pipelining — a Transaction Processing Unit for validation optimization
- Cloudbreak — Horizontally-Scaled Accounts Database; and
- Archivers — Distributed ledger storage
These technologies provide Solana with the ability to function without layer 2 structures, a data structure used by many large sharding and layer 2-oriented networks. This allows developers to quickly build directly on the Solana blockchain, which allows users to perform millions of operations per second.
Legitimacy Screening of Solana
Anatoly Yakovenko, ex Qualcomm, Dropbox software started Solana in the year 2017, when it then went on to raise $25 million in both public and private funding rounds with its ICO.
This gives us the confidence to confirm that Solana 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 Solana project aligned with Islamic values?
Yes, Solana crypto project does align with Islamic values as the protocol facilitates the creation of Decentralized Applications (DApps). It aims to increase scalability by introducing a proof of history (PoH) consensus along with the underlying proof of stake (PoS) consensus of the blockchain technology. There is nothing against Islam about such a technology.
Financial Screening of Solana:
Financial screening ensures that the crypto asset meets the financial criteria for Shariah compliance, if it is an equity based token. Solana: SOL 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.
SOL Token Screening for Shariah Compliance
Token Type: Native
Token Uses: Payments
SOL token is used to pay for transaction fees and staking. This token has a utility that is permissable under Shariah so Solana’s SOL token is considered halal.
Is Staking Solana Halal?
Stakers can place their SOLs directly on the Solana network or send them to an active validator in order to guarantee the security of the Solana network and earn inflation rewards. 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 SOL?
Marhaba DiFi‘s Shariah governance board also beleives Solana: SOL is halal.
Crypto Halal Office for Monitoring and Sharia auditing on cryptocurrency markets thinks Solana: SOL coin is a Halal digital asset based on its Shariah complaince screening.
Pratical Islamic Finance (PIF) is comfortable with Solana as a halal investment
Islamic Finance Guru (IFG) believes Solana: SOL is a halal cryptocurrency based on its method of Shariah complaince screening.
Sharlife considers Solana: SOL 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 Solana Halal: Is SOL Crypto Coin Halal?
Yes, Solana: SOL crypto coin is Halal as it is a third-generation blockchain that supports a wide range DiFi solutions, including the development of decentralized applications (DApps) and smart contracts. This technology is not against Shariah guidelines so Muslims may invest, trade and stake SOL 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.