The question of the ruling on digital currencies related to DeFi (decentralized finance) is a complex issue that requires careful study according to the provisions of Islamic Sharia, as the ruling differs based on how these currencies are used and their operating system.
Key points to understand the topic:
1. What is DeFi?
Decentralized finance (DeFi) refers to a financial system that relies on smart contracts and blockchain technology to provide services such as lending, borrowing, and trading, without the need for a traditional financial intermediary such as banks.
2. Benefits (usurious interest):
Many DeFi protocols rely on offering or charging interest on loans and deposits, which falls under usury, which is forbidden in Islamic law. Any system that includes fixed interest or guaranteed profit rates on capital is often considered haram.
3. Benefit from trading cryptocurrencies in DeFi:
If investing in DeFi platforms is based on activities that are free from usury and forbidden practices, such as buying and selling the cryptocurrency itself or engaging in activities such as providing liquidity on Sharia-compliant terms, then it may be permissible. However, this requires careful verification.
4. Fraud and high risk:
Many DeFi projects are high-risk, and some may be shady or purely speculative (gharar), which is considered haram.
Conclusion:
If a DeFi system relies on interest or other forbidden practices, it is not permissible to invest in it or benefit from it.
God knows best. Seek refuge in God, may He forgive us and you.