HALAL Screening Cryptocurrency
Is dYdX Halal?
Complete Shariah Compliance Screening of dYdX to determine if it is a Halal or Haram cryptocurrency
Legitimacy Screening
What is dYdX
DYDX is a cryptocurrency that powers a decentralized trading platform, allowing people to trade various digital assets without relying on traditional banks or exchanges. Think of it as a marketplace where you can buy and sell cryptocurrencies directly with others, but with the added benefit of advanced features like margin trading and lending. This means you can borrow funds to trade larger amounts, potentially increasing your profits (though it also comes with higher risks).
What makes DYDX unique is its focus on providing a user-friendly experience while still offering powerful trading tools. It operates on the Ethereum blockchain, which ensures that transactions are secure and transparent. Plus, because it's decentralized, you have more control over your funds and don't have to worry about a central authority freezing your account. Overall, DYDX combines the best of both worlds: the freedom of crypto with the sophistication of traditional trading platforms!
Transparent and Credible Team
The dYdX team includes founder Antonio M. Juliano, CEO of the dYdX Foundation Charles d'Haussy, and new CEO Ivo Crnkovic-Rubsamen, all with credible backgrounds. The team's experience in software engineering, business development, and finance suggests a transparent team with a credible history, so a high score is warranted.
Score: 85
Clear Use Case or Purpose
dYdX aims to be a decentralised perpetuals exchange, utilising the Cosmos SDK and Tendermint consensus protocol. The platform's purpose is clearly defined, and the technology is designed to mitigate MEV and ensure decentralisation, indicating a clear and legitimate use case.
Score: 90
Absence of Fraudulent Behavior
dYdX has undergone security audits by Informal Systems and Bramah Systems. These audits indicate an effort to verify the legitimacy of the platform and its smart contracts. The audits identified some issues, but they were addressed, suggesting an absence of fraudulent activity. However, there have been some transparency issues regarding the utilization of trading fees and token ownership.
Score: 80
Ethical Practices
dYdX uses compliance vendors to scan for illicit activity and has a governance framework using the DYDX token. While the platform aims for transparency, there are concerns about the lack of clear information regarding past trading fees and the structure of the dYdX foundation, and some concerns from users.
Score: 70
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dYdX 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.
dYdX 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
dYdX 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 dYdX Halal?
- Are the staking operation aligned with Shariah-compliant structures.
- Does the staking avoid Gharar (excessive uncertainty) and Maysir (gambling)?
dYdX Shariah Compliance Score
- Total Shariah Compliance Score out of 100
- 27 different components researched
- More comprehensive than any other platform