Assalaamu alaykum,
I also agree that Yield Farming from what I have seen so far in the industry is interest based.
whenenever your crypto holdings are temporarily at the disposal of some startup’s application or someone else whilst guaranteed for you and earns its owner more crypto currency, without any equity stake or trade, it falls under interest and a form of lending crypto.
Allah knows best
thank you
Peace upon you
@Mufti_Billal @Mufti_Faraz_Adam
Asalamualekum. Would it be ok to just trade these yield farming tokens for profit instead of borrowing or lending them?
Would it be ok to just trade these yield farming tokens for profit instead of borrowing or lending them?
In othet words can i buy tokens /coins on binance spot market and trade but dont involve in yield farming?
alsi please guide is crypto staking halal or haram?
please i am in hard need of these answers
please guide.
Assalamu alaykoum
I would like to know if this type of yield farming is permissible (based on the RFI token : https://reflect.finance/ ) :
"RFI works by applying a 1% fee to each transaction and instantly splitting that fee among all holders of the token.
Holders do not need to stake or wait for fees to be delivered. Fees are awarded by the smart contract and are immediately reflected in the holders balance.100% of the fees generated go to holders of the token. The percentage of fees you earn is calculated by the percentage of RFI that you own among holders. This generates a much higher yield than would be possible otherwise.
@Mufti_Faraz_Adam @Mufti_Billal
Please see the attached explanation from Binance academy:
" Yield farming, also referred to as [liquidity] mining, is a way to generate rewards with cryptocurrency holdings. In simple terms, it means locking up cryptocurrencies and getting rewards.
In some sense, yield farming can be paralleled with [staking]. However, there’s a lot of complexity going on in the background. In many cases, it works with users called liquidity providers (LP) that add funds to liquidity pools.
What is a liquidity pool? It’s basically a smart contract that contains funds. In return for providing liquidity to the pool, LPs get a reward. That reward may come from fees generated by the underlying DeFi platform, or some other source.
Some liquidity pools pay their rewards in multiple [tokens]. Those reward tokens then may be deposited to other liquidity pools to earn rewards there, and so on. You can already see how incredibly complex strategies can emerge quite quickly. But the basic idea is that a liquidity provider deposits funds into a liquidity pool and earns rewards in return.
Yield farming is typically done using [ERC-20 tokens] on Ethereum, and the rewards are usually also a type of ERC-20 token. This, however, may change in the future. Why? For now, much of this activity is happening in the Ethereum ecosystem.
However, [cross-chain bridges] and other similar advancements may allow DeFi applications to become blockchain-agnostic in the future. This means that they could run on other blockchains that also support smart contract capabilities.
Yield farmers will typically move their funds around quite a lot between different protocols in search of high yields. As a result, DeFi platforms may also provide other economic incentives to attract more capital to their platform. Just like on exchanges, liquidity tends to attract more liquidity"
Based on the above, do you still believe that farming is haram? I am struggling to figure out whether providing liquidity is interest or not?
Shukran.
Yeah I’d like to know this as well. Based on the previous answers from @Mufti_Faraz_Adam & @Mufti_Billal, it would seem to be Halal because you aren’t lending your crypto to anyone else. Ofcourse wait for them to give their answers first.
I would like to know the answer as well. But till then, when in doubt about something being haram or halal, it is recommended to stay away from that.
@Mufti_Faraz_Adam & @Mufti_Billal
I would like to know the answer to gin_hill question please
Jazakoum Allahou khayran
i am interested in this topic as well, i did sme trade for a coin that is about mining bitcoin but their token can also be used for yield farming, coin was called METH, made some gains, now i m questioning what should i do with the gains.
I did not yield farm, just bought and sold, did sell just as the yield farming was starting, but to me it seems some of the token value is coming from yield farming
I’m also interested to know the answer here … JZK
I am also looking for an answer from the well versed in this area.
To me, traditional banks also use the same incentive; if we put money in savings account or term deposit you earn interest because you are providing liquidity to the bank. Staking / farming follows the same logic in my humble opinion.
secondly, another member mentioned earlier when in doubt stay away from it.
Hope we can get a definitive answer on this and put this to rest.
Regards,
Same I need some help. Most crypto these days offer some sort of staking or yield farming service for their crypto, even its it is just a side thing. So does that mean it’s haram to just buy their coins without being involved in staking, because it has some sort of involvement in farming or staking. I guess if noone staked, there would no liquidity in the decentralised exchanges? I also found another mufti online saying staking is different to interest so it’s OK to stake on some coins, this is complex.
Salaam, does this help?
The Muftis here are of the opinion (i think both of them) that the principle of staking is permissible. Though it would depend on how the staking works exactly
AWW,
I came across an NFT project where you farm the coin and in return you will earn a separate coin that will only be used to redeem curated and selected NFTs on their platform. Do you think this form of farming is halal?
Here is the project: https://ethernitychain.medium.com/introducing-ethernity-stones-9d05ef2ba722
I would really appreciate your response on this.
Jzk!
AWW,
I came across an NFT project where you farm the coin and in return you will earn a separate coin that will only be used to redeem curated and selected NFTs on their platform. Do you think this form of farming is halal? The way it works seems a bit different than other projects.
Here is the project: https://ethernitychain.medium.com/introducing-ethernity-stones-9d05ef2ba722
I would really appreciate your response on this.
Jzk!
sorry all but can someone tell me what is the difference between farming and staking?
and is farming halal ?
regards,
also want to know about this
Salaam guys,
we’ve done a few articles on this which should hopefully prove helpful:
Assalamu alaykoum,
Thank you, Sir for your answer, but what do you think about buying and selling monies from platforms that do yeld farming and lending.
I want to talk about the currency dedicated to its platforms whose main activity is farmin and lending.