HALAL Screening Cryptocurrency
Is Ethena USDe Halal?
Complete Shariah Compliance Screening of Ethena USDe to determine if it is a Halal or Haram cryptocurrency
Legitimacy Screening
What is Ethena USDe
USDE, or the United States Digital Dollar, is a type of cryptocurrency that aims to represent the U.S. dollar in a digital format. Think of it as a virtual version of cash that you can use online. It’s designed to make transactions faster and more efficient, allowing people to send and receive money instantly without the need for banks or middlemen. This can be especially helpful for things like international payments, where traditional methods can take days and come with high fees.
What makes USDE unique is that it’s backed by the U.S. government, which gives it a level of trust and stability that many other cryptocurrencies don’t have. While other digital currencies can be quite volatile, the USDE is intended to maintain a stable value, making it easier for people to use in their everyday lives. Plus, it could help bring more people into the digital economy, making financial services more accessible to everyone.
Transparent and Credible Team
Ethena's team includes Roxanne Petraeus (Co-Founder and CEO) and Guy Young (Founder and CEO of Ethena Labs), both of whom have experience in finance and other relevant sectors. This indicates a reasonably transparent team. However, the sources also note a lack of detailed public information about the project’s operational procedures.
Score: 75
Clear Use Case or Purpose
Ethena aims to provide a stable, censorship-resistant, synthetic dollar (USDe) that is fully backed and scalable. It uses delta-neutral hedging to maintain its peg, and generates yield through various mechanisms. The sources explain various use cases including low-cost remittance services and DeFi integration. This demonstrates a clear use case, though some risks do exist.
Score: 85
Absence of Fraudulent Behavior
The project has undergone smart contract audits by third-party security firms. Ethena also provides custodian legal attestations to verify the backing assets of USDe. There are some concerns about the insurance fund's adequacy and the lack of transparency in some operations. However, there is no direct evidence of fraudulent behaviour.
Score: 80
Ethical Practices
Ethena is working towards regulatory compliance, particularly with MiCAR in the EU. It conducts KYC/AML checks on users. However, there are concerns about transparency issues and the governance structure, where functionalities are yet to be activated.
Score: 70
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Ethena USDe 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.
Ethena USDe 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
Ethena USDe 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 Ethena USDe Halal?
- Are the staking operation aligned with Shariah-compliant structures.
- Does the staking avoid Gharar (excessive uncertainty) and Maysir (gambling)?
Ethena USDe Shariah Compliance Score
- Total Shariah Compliance Score out of 100
- 27 different components researched
- More comprehensive than any other platform