Whether it’s launching a blockchain project, issuing an asset backed token or setting up a digital asset fund.
You can leverage upon our Sharia advisory experience, as we have been advising a diverse set of clienteles in several capacities.
How we support you
We have been at the forefront when it came to reviewing blockchains, their consensus mechanism and their tokens in light of Sharia. With evolving use-cases, we have helped projects tokenize real world assets like oil, real-estate, and metals, creating a new investment class. Clients range from Blockchain foundations, Crypto-exchange operators, asset-based token Issuers and digital asset portfolio fund managers. So, if you have developed a distributed app (Dapp) that addresses a unique pain point or offers rewards through staking, and you would like to provide Sharia assurance to your investors, then we are here to assist. Examples of the different type of clienteles that we help:
Sharia has a code of precepts and values for trading and for any brokerage service to be Sharia complaint it must fulfill those commercial standards. In addition to this, the operator’s services like savings, lending, margin lending, staking, derivative products etc have to be evaluated. In conducting this service, we also provide token assessment service, helping you classify its utility in light of Sharia making it identifiable and easier for your clients to invest.
Data blocks are hosted across network of computers carrying transactional information serve as distributed ledgers. The smart contracts that facilitate transfer of digital assets need to be assessed including the parameters that define them and the rewards offered for validations. Similar to legal agreements and contracts, our Sharia scholars review the provisions making up the smart contracts in light of Sharia and propose modifications for attaining congruence with Sharia compliance.
We have worked with several clients who have issued tokens backed with real world assets. The blockchain technology has made it easy to securitize assets for trade and non-trade purpose. From a Sharia perspective, our scholars will review the nature of the underlying asset and make-up of the token as per Fiqh rulings. Equally important is the
periodical Sharia audit to verify the 1-1 asset token backing. We have worked with clients who have tokenized under-ground oil reserves, real-estate and commodity metals.
Investment rewards through Validating & Staking:
The crypto space provides several opportunities to invest and reap rewards by locking up tokens. Most frequently sought out incentives are the ‘Validation rewards’ and the ‘DeFi Staking’ programs. Both need to be carefully assessed in light of Sharia rulings prior to investment. It is observed that De-Fi staking is more problematic and requires a careful assessment of the underlying mechanics and the revenue generation program. We offer a compete Sharia review of the underlying modality, provide suggestive solutions and conduct periodical audits to ensure Sharia compliance.
Digital Asset Portfolio:
As cryptocurrencies continue to mature, there is a growing interest among family offices and investors to embrace this Sharia complaint investment class. We help investment managers set up portfolios for their clients by evaluating cryptocurrencies, Stablecoins, NFTs, staking programs, DeFi yields etc. We also provide a consultative guideline, which serve as reference point when narrowing down the asset list for investment. We also certify crypto-backed Exchange Traded Products (ETPs) for primary and secondary trade.
We have more than 30 sharia scholars that are able to provide rich insight and review the product structure in light of Sharia. The review and certification are followed with periodical audits to ensure compliance. This provides assurance to the stakeholders and the users of the crypto service provider.
Benefits of Sharia compliance?
Islamic finance addresses the need of a faith-based community that is growing at a fast pace. There is a natural preference towards Sharia compliant financial products and investments. Having your blockchain or crypto token certified can:
- Open your crypto currency to Islamic investors.
- Trigger crypto-financial inclusion.
- Become a part of the investment community that adheres to ethical and moral standards.
Education: Keeping the public informed
We’ve created a dedicated page (link) which provides scholarly insight and assessment into the nature, utility and economics of cryptocurrencies, tokens and where they stand in light of Sharia.
Other scholarly insights covering the following topics which can be read here.
You can reach out to [email protected] and explore your ideas from a Sharia perspective.
Contact us today!