HALAL Screening Cryptocurrency
Is Stellar Halal?
Complete Shariah Compliance Screening of Stellar to determine if it is a Halal or Haram cryptocurrency
Legitimacy Screening
What is Stellar
XLM, or Stellar Lumens, is a type of cryptocurrency designed to make sending money across borders faster and cheaper. Imagine you want to send money to a friend in another country; usually, it can take days and cost a lot in fees. XLM aims to change that by allowing people to transfer money almost instantly and with very low fees, making it super accessible for everyone, especially in places where traditional banking is hard to come by.
What makes XLM unique is its focus on connecting different financial systems and currencies. It uses a special technology called the Stellar network, which allows various currencies to be exchanged seamlessly. So, if you have dollars and want to send them to someone who uses euros, XLM can help make that happen without the hassle of currency conversion. Plus, it’s designed to help those who are unbanked or underbanked, giving them access to financial services they might not have otherwise.
Transparent and Credible Team
The report identifies Jed McCaleb, Joyce Kim, Patrick Collison and David Mazières as key people with relevant experience. McCaleb’s history includes founding Mt. Gox and co-founding Ripple. While there is some controversy surrounding McCaleb, the team's tech and crypto experience is well-established. Score: 85
Clear Use Case or Purpose
Stellar aims to provide equitable access to the global financial system, enabling cross-border payments and tokenization of assets. It has use cases in areas like aid and assistance and is considered a viable alternative to other stablecoins. It has also received Sharia compliance certification. Score: 90
Absence of Fraudulent Behavior
The report mentions third-party audits for smart contract security and partnerships with Elliptic for AML/KYC compliance. There is also no mention of any rug pulls or scams by the team. However, the report notes instances of scams and false advertising associated with Stellar which can be considered a risk. Score: 75
Ethical Practices
Stellar emphasises transparency through its open-source nature and public ledger. It has compliance features built into the network to adhere to AML and KYC regulations. It also has partnerships with regulatory bodies. The network is also energy-efficient with its consensus protocol. However, there are some concerns about the centralization of the project around the Stellar Development Foundation (SDF). Score: 80
Sign in to view the rest of Stellar's Shariah Compliance Report
Stellar 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.
Stellar 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
Stellar 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 Stellar Halal?
- Are the staking operation aligned with Shariah-compliant structures.
- Does the staking avoid Gharar (excessive uncertainty) and Maysir (gambling)?
Stellar Shariah Compliance Score
- Total Shariah Compliance Score out of 100
- 27 different components researched
- More comprehensive than any other platform