Question

salam 3alykum.

A friend of mine is encouraging us to explore a website that leverages DeFi technology to generate profits.

I have concerns that engaging in such activities might inadvertently involve us in earnings that could be considered haram. The website he’s promoting is called “Yunus Loop DeFi,” and you can find it at this link: https://yunusloopdefi.com/#/.

Therefore, my question is: Does participating in this venture align with Islamic principles and qualify as a halal means of earning money?

Answer

Utilising this platform and protocol would be deemed impermissible under shariʿah due to its lending structure.

This protocol operates on a lending-based model, where depositors contribute funds to a pool that borrowers can access for loans. Borrowers are then required to pay interest on the borrowed amount, resulting in depositors receiving dividends. This structure effectively constitutes an interest-based transaction, which contravenes Islamic principles.

السنن الصغير للبيهقي (2/ 273) – وَرُوِّينَا عَنْ فَضَالَةَ بْنِ عُبَيْدٍ، أَنَّهُ قَالَ: «كُلُّ قَرْضٍ جَرَّ مَنْفَعَةً فَهُوَ وَجْهٌ مِنْ وُجُوهِ الرِّبَا»

Answered by:
Ifta Research Fellow

Checked & Approved by:
Mufti Abdul Rahman Mangera
Mufti Zubair Patel