What is Shariah Screening? How can someone know if a certain coin or token is halal or haram?
There are thousands of tokens which already exist and people (Ulema / Islamic Scholars) are working hard to provide rulings (halal/haram) over them. One thing to note is that it is not possible to provide a ruling for all the existing and upcoming coins / tokens. Therefore a process known as “Shariah Screening” may be adopted to find out about existing and future coins/token and their status if they are halal or haram.
The most important aspect in Shariah Screening is going through the Whitepaper/Litepaper/Technical Paper. Whitepaper or litepaper is a detailed document of a coin/token that lists all the details including use case, tokenomics, core operation, team, future prospects etc, which provides you with insight on whether it is shariah compliant or not.
Here is an example of SOL’s (Solana) whitepaper: https://solana.io/solana-whitepaper.pdf
Now what are the things you should keep in mind while reading the white paper?
What are the Core operations: is the core operation of SOL halal?
Check to see if it is involved in haram activities like Alcohol, gambling, adult entertainment, Interest (SOOD), non Islamic financial services, insurance, mortgage, Haram Food products, Drugs, Counterfeit products, Adult NFT / Metaverse.
Knowing about the core operations is responsibility of the user.
Crypto Halal telegram group has listed many coins/tokens description and provided ruling over them.
Always DO YOUR OWN RESEARCH in this regard aswell. Dont take anyone’s word on it (even ours). Make judgements on logic and not emotions.
Lets take an example and look at why AAVE coin is haram?
Go to the official website and it say’s “Aave is an open source and non-custodial liquidity protocol for earning interest on deposits and borrowing assets”
You don’t even need to read whitepaper to judge if AAVE is halal or haram. Shariah Screening against Stocks can be read here which explains the procedure in detail or Google can always be used against keywords “Shariah Screening”.
May Allah guide us all to the right path. Ameen
Special Thanks to Adnan Babar a community member of Cryptocurrency Pakistan Group for providing this content