A team based in Sydney, Australia, claims to be building the world’s first decentralized financial platform run by Sharia law, which finds a course between the advantages of DeFi and the beliefs of the Islamic financial world.
Marhaba’s decentralized financial platform – Marhaba means “welcome” in Arabic – is expected to be launched in the coming months and is intended to offer the Islamic world a DeFi platform that is shaped by the principles of Sharia law.
Speaking to Cointelegraph, Blockchain Australia Solutions CIO and Marhaba CEO and Founder Naquib Mohammed emphasized that a key tenet of Sharia-based financing is to ensure that “both the financial institution providing a service and the customer must win in the financial transaction ”.
“We are building a platform aimed at community inclusiveness and a trustworthy place where faithful Muslims can be brought on board without hesitation or doubt.”
After Mohammed founded the business-oriented platform Spherium Finance in early 2020, he focused on developing a platform that would do justice to the Muslim world population of two billion people.
Mohammed noted that the Marhaba team has been researching attitudes of many Arab communities towards crypto assets. He told:
In Muslim countries we have found that 99% of the time people are asked: “Is that a Halal sign? Does this mark conform to Sharia law? ‘ […] Question number two is, ‘Where do you buy this?’ ”
While most new crypto projects begin by tinkering with a test net and finding talented meme lords on social media, Marhaba’s journey began with Mohammed seeking respected Islamic scholars who also understand and believe the crypto asset sector that decentralized finance can be carried out in a way that adheres to the idea of Sharia law.
The Islamic concept of “riba” (usury) prohibits “high yield loans or aggressive derivatives” and gambling transactions (“maysir”), and those that pose undue risk or doubt (“gharar”) are also prohibited. Mohammed noted:
“The reason Bitcoin is still being discussed by some scholars in the Islamic ecosystem is that nobody knows who the creator of Bitcoin is. If you don’t know who made it, it means the thing is in doubt. “
Marhaba DeFi will initially launch its non-custodial “Sahal Wallet”, which supports custody and transfer in “Sharia-screened tokens and NFTs”.
Marhaba will hire a team of “highly qualified internal Sharia advisors” to ensure that the products and tokens supported by the platform are guided by Sharia law. The team systematically evaluates the tokens listed on crypto data aggregators from largest to smallest and, once approved, carries out regular reviews of the projects.
Future versions of the wallet will be integrated with Marhaba’s upcoming “Ethical Trading”, “Revenue Maximizing Bucket”, decentralized charity, payment solutions and NFT marketplace products.
Mohammed describes Marhaba’s yield maximization bucket as a “Sharia-compliant version of yield farming” and notes:
“It’s not exactly productive farming, it’s quite innovative because we make different investment buckets for you to maximize profits.”
Although charging interest on loans is prohibited under Sharia law, Marhaba is also investigating the borrowing and lending of products that mobilize depositors’ wealth without charging them interest.
The start of the NFT marketplace is planned for the end of this year. The Marhaba team is working to bring on board respected artists who will create traditionally inspired Islamic calligraphy to mark on the platform.