Is Uniswap platform halal? And is liquidity pool halal?

Investment Questions and Chats Crypto
#1

As Salaamu Alaykum, Mufti Faraz, Mufti_Billal and the rest of you all…
Here a link about what is (Uniswap) DEX platform?
:point_down:t2:

And here what is (liquidity pool)?

Jazak AllahuKhairn

@Mufti_Billal
@Mufti_Faraz_Adam

#2

Salam Alikom,

I’m also interested to know this and to know if UNI token is halal.

JZK

1 Like
#3

See this link for info. Answer posted below. https://www.islamicfinanceguru.com/crypto/

  • Sharia Analysis UNI is a token for a project that essentially doubles up as a broker-less crypto exchange platform. Think coinbase, but automated and without a central clearing authority. So far so good. But the issue here is that UNI structure relies on people to contribute in their coins (and get paid a fee for this) into the system to provide liquidity.

Exchanging using Uniswap itself is fine. But that is not the question here.

The question is whether UNI itself is inextricably structured to be used in a way that ends up being sharia-non-compliant. The key issue is the contribution of coins to provide liquidity.

Either we view this as some form of lending out or we see it as taking an equity-like position or revenue-sharing position that someone. On the basis that fundamentally each contract does not diminish with each exchange (rather it is balanced out with the new coin that is entered in) we consider uniswap to be using a form of revenue-sharing or taking mini-equity-like positions in each Exchange Contract.

2 Likes
#5

You can find the response here. Liquidity pools seems to be haram and Allah knows best.

#6

I think there is some misunderstanding. The article shared by you does provide good reasoning in favor of Liquidity Mining not being Haram.
The author has used the term liquidity pool for pools created on AMM like uniswap that allow more efficient swap of tokens and that is how Liquidity Mining is implemented.
Authore suggests it is not Haram.
However, in the end the author states those (specific) Liquidity Pools that are used to take out loans and give interest to the liquidity providers are not Halal…

I think, as per this rationale uniswap token should be halal. (and Allah knows best)