Islamic crypto as envisaged by Islamic DAO represents a paradigm shift in the world of permissionless financial services driven by public blockchains. Islamic or halal crypto represents value on decentralized networks that is based on verifiable earnings and quantifiable productivity.
The halal crypto paradigm replaces leverage with productivity, imparts sustainability to DeFi instead of rampant volatility, and results in profits based on commercial activity instead of interest based on lending or unstable yield farming.
The desire to make money from money is as old as civilization itself. However, in many cases it can be counter-productive. Interest is forbidden in Islamic law because it sequesters capital, capital that could otherwise be used as a vector for global production. Sequesterization encourages capital to idle, and consequently economic production suffers.
Islamic financial thought treats capital as a
Conventional DeFi is marked by the immense use of leverage, imparting very high risk to trades and investments.
Emerging DeFi organizations have turned crypto into obscure leveraged assets, simulating fiat and making a lot of the same mistakes as TradFi operators.
Islamic DeFi as led by Islamic DAO and driven by Islamic Token is an opportunity to accelerate finance-led global productivity, to revitalize the global economy by blockchain secured profit generation, and to configure global capital for maximum production efficiency. Smart contracts ensure that capital is deployed as intended, in the most productive businesses. Islamic DeFi uses verifiable productivity to replace leverage.
Conventional Islamic financial services such as Mudarabah and Musharakah can be reconfigured very efficiently into permissionless investment pools, leading to true Islamic DeFi.
Chain and cloud-based profit tracing and business performance information can be empirically represented on-chain by Islamic Oracles, driving remunerative intelligence for profit-driven Islamic DeFi services. Remunerative intelligence may draw upon such resources as open-banking and payments processors to create an accurate picture of business performance, informing profit-sharing and actualizing the Islamic DeFi philosophy. Remunerative intelligence will form the basis on which to evaluate participants in the Islamic crypto economy.