Why is this important for you?
There’s a thin line between Halal and Haram in terms of investments, and we are often blindsided by the returns from the markets.
I often get asked about the “Strong Halal Staking Crypto projects.”
When in fact, you should ask me about the criteria of what makes staking Halal or Haram.
So, I’ll use this post to tell you about:
what is Staking?
what are the two types of Staking?
Criteria to differentiate Halal and Haram Staking
5 Strong Halal Staking Crypto Projects.
Disclaimer: I am not an Islamic scholar, nor do I represent any Islamic organization. All thoughts are my own opinion that should not be taken as financial advice. I may be wrong, Allah knows best. Remember to always do your own research.
What is Staking and what are the two types of Staking?
Staking: Locking cryptocurrencies to receive rewards.
There are mainly two types of staking:-
i) Proof of Work (PoW): You use high-end computers to solve difficult mathematical puzzles and whoever solves it first (according to the specs), gets rewarded. An example of such staking is Bitcoin BTC.
ii)Proof of Stake (PoS): You lock up your crypto in a pool to secure the network, in return you get paid the transaction fee.
Criteria to differentiate Halal and Haram Staking
Halal Staking: When you lock your crypto assets to support and secure the network and operations of that particular project, you get rewarded a transaction fee to support the network. It's also called "Proof of Stake". The more coins you stake, the more secure the network becomes. You are never guaranteed a confirmed return as the value of the crypto keeps on changing. An example of such a project is Tezos XTZ.
Forbidden Staking in Islam: If you lock a crypto asset for a particular time period on the blockchain and that particular blockchain lends it out to others, in return, they get paid interest and that interest is divided and paid back to you according to the amount you contribute. This type of staking is completely forbidden in Islam. An example of such a blockchain project is AAVE & CAKE.
5 Strong Halal Staking Crypto Projects.
Staking is a great way to generate passive income. One amazing tool that you can use to search for projects and their staking potential is www.stakingrewards.com/earn.
Here are some of my favorite projects for staking:-
1)-Solana (SOL)
This is also one of my favourite projects, the current APY for SOL is around 4%. You can simply keep Solana on Binance and they assign you to their partner validator and you start earning. You can also download Exodus wallet and start staking Solana in Exodus wallet.
Out of the 100% supply of Solana blockchain, almost 76% is staked to make the network secure and robust. We love seeing such massive projects for the long term.
2)-Tezos (XTZ)
You can stake Tezos by simply holding this coin on Coinbase, Binance or even Ledger Nano X. Current annual yield on Tezos is around 3% minus a validator's fees. When you start delegating, it will take almost 5 weeks for you to receive your first rewards.
Currently, 75% of the circulating supply of Tezos is staked.
3)-Algorand (ALGO)
Again, this is another good project for which you can participate in PoS staking by holding the coin on Coinbase or Binance. Coinbase is currently offering 6% APY whereas Binance is offering 8%. Almost 85% of ALGO tokens are locked in for staking.
4)-VeChain (VET)
This project is one of my favourite in supply chain management. This network has two coins, the main coin VET which acts as a store of value, and VTHO which is needed to interact with VeChain network. You can buy VET on Binance, transfer it to VeChainThor (you can download this app on both iOS and Android), and start staking. The staking APY is around 3%.
5)-Cosmos (ATOM)
Cosmos is a project that can create an internet of blockchains to achieve true decentralization. You can simply stake ATOM by keeping it on Coinbase and earning 5% APY. You can also stake them on Ledger or many other wallets. The first rewards payment is credited after approximately 7-14 days. Every payment after that is credited approximately every 7 days
These are some of the projects that I personally love, there are many projects out there that you can search and evaluate. As long as you are holding your coins on an exchange that finds the delegator to do the staking work for you, it's fine and you need not worry about it. However when you select a staking provider on your own, please be very careful and only go for the trusted staking provider.
May Allah protect all of us from the sins we commit unconsciously!
For any query, feel free to comment below….
Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.
but the percentage of return is fixed so how can you justify it?
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