HALAL Screening Cryptocurrency
Is Decentraland Halal?
Complete Shariah Compliance Screening of Decentraland to determine if it is a Halal or Haram cryptocurrency
Legitimacy Screening
What is Decentraland
MANA is the cryptocurrency used in Decentraland, a virtual reality platform where users can create, explore, and trade digital land and assets. Think of it like a digital world where you can buy virtual real estate, build cool stuff, and even host events. People use MANA to buy land and items within this virtual space, making it a fun way to interact and express creativity in a whole new way!
What makes MANA unique is that it’s not just a currency; it’s tied to a vibrant community and a growing virtual economy. Unlike traditional currencies, MANA is decentralized, meaning it’s not controlled by any government or bank. This gives users more freedom and ownership over their virtual experiences. Plus, as more people join Decentraland and create exciting content, the value of MANA can increase, making it an interesting investment for those who believe in the future of virtual worlds!
Transparent and Credible Team
The report identifies the co-founders, Esteban Ordano and Ari Meilich, and details their experience and roles. This suggests a transparent team with a credible history. However, there is no further detail on the team structure or advisors.
Score: 75
Clear Use Case or Purpose
The whitepaper outlines Decentraland's purpose as a decentralized virtual world where users can create, explore, and monetize digital environments. However, according to Islamic Scholars, "Decentraland and MANA token do not add any real-world value or benefit". This is a direct conflict with Shariah principles, so the score should be halved in this section.
Score: 45
Absence of Fraudulent Behavior
The report mentions third-party audits of the MANA token smart contracts by EtherAuthority, which found the contracts to be "secured". There's also mention of a phishing scam alert by PeckShield, highlighting the need for security measures, but this does not reflect on Decentraland's legitimacy.
Score: 80
Ethical Practices
Decentraland has a Code of Ethics for employees, which includes policies on honesty, integrity, and compliance with laws. It also has a governance structure through its DAO. However, Islamic Scholars states that Decentraland and the MANA token "should be avoided as it does not qualify under Shariah principles as a valid asset nor a valid service". Since the project is deemed to have no value under Shariah, this has a direct conflict with Shariah principles so will be halved.
Score: 40
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Decentraland 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.
Decentraland 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
Decentraland 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 Decentraland Halal?
- Are the staking operation aligned with Shariah-compliant structures.
- Does the staking avoid Gharar (excessive uncertainty) and Maysir (gambling)?
Decentraland Shariah Compliance Score
- Total Shariah Compliance Score out of 100
- 27 different components researched
- More comprehensive than any other platform