HALAL Screening Cryptocurrency
Is DAI Halal?
Complete Shariah Compliance Screening of DAI to determine if it is a Halal or Haram cryptocurrency
Legitimacy Screening
What is DAI
DAI is a type of cryptocurrency known as a stablecoin, which means its value is designed to stay close to a specific amount, usually one U.S. dollar. Unlike other cryptocurrencies that can fluctuate wildly in price, DAI aims to provide stability, making it easier for people to use it for everyday transactions or savings. It’s created by a system called MakerDAO, which uses smart contracts on the Ethereum blockchain to manage its value and ensure it remains stable.
What makes DAI unique is that it’s decentralized and backed by collateral, meaning it’s not controlled by any single entity like a bank. Instead, users can lock up other cryptocurrencies as collateral to generate DAI. This way, it combines the benefits of digital currency with the stability of traditional money, allowing people to send, receive, or hold value without worrying about sudden price changes. Plus, since it operates on the blockchain, transactions are transparent and secure!
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Transparent and Credible Team
The DAI cryptocurrency is managed by MakerDAO, founded by Rune Christensen, who has a background in biochemistry and international business. The Maker Foundation was established to support the ecosystem. There is a mention of a former CTO, Andy Milenius, who departed due to disagreements, which indicates some transparency. Score: 70
Clear Use Case or Purpose
DAI aims to be a stable digital asset, maintaining a value of one US dollar through a system of Collateralized Debt Positions (CDPs) and autonomous feedback mechanisms. This indicates a clear and legitimate purpose. Score: 90
Absence of Fraudulent Behavior
The DAI cryptocurrency has been audited by third parties like Callisto Network and ChainSecurity, with no critical security issues found. These audits, along with the use of smart contracts on the Ethereum network, suggest a commitment to transparency and security. Score: 85
Ethical Practices
DAI operates on the Ethereum network using smart contracts, ensuring a trustless, permissionless, and decentralized operation. The system is designed to be transparent and auditable, allowing anyone to verify its collateralization. Score: 85
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DAI Halal Project Screening
- Are the project’s purpose and operation Shariah Compliant.
- Does the project operate ethically and transparently, without harm to society.
- Does the project promote positive societal or environmental outcomes.
DAI Financial Screening
- Does the revenue involve Riba (interest), Gharar (excessive uncertainty), or Haram activities.
- What red flags are hidden within the projects finances and are within permissible limits.
- Types of revenue generation activities and the percentage that may be Riba or interest based.
- Audits from reliable sources
DAI Token Screening
- Is the Token governance fair and ethical?
- Are profit-sharing mechanisms (e.g., staking rewards, dividends) compliant with Islamic Finance?
- Does the token’s design, or unlock schedule raise unethical concerns?
- Halal underlying asset, and free from impermissible elements
Is Staking DAI Halal?
- Are the staking operation aligned with Shariah-compliant structures.
- Does the staking avoid Gharar (excessive uncertainty) and Maysir (gambling)?
DAI Shariah Compliance Score
- Total Shariah Compliance Score out of 100
- 27 different components researched
- More comprehensive than any other platform