السلام عليكم ورحمة الله وبركاته
Myself and a number of brothers have invested in a crypto token VRA - Verasity. These are some extracts from the whitepaper to give an idea of what it is involved in:
“Verasity is a Protocol and Product Layer Platform for Esports and Video Entertainment”
“Verasity’s mission is to significantly increase advertising revenues for video publishers on any video platform through its rewarded player and ad stack utilizing its patented protocol layer on the blockchain”
VRA is a token used as a medium of exchange exclusively for the online gaming and video economy. The VRA token is also bought by advertisers to engage viewers and reward them for their attention. Each time there is a call from Verasity’s network to display a video ad, one of Verasity’s programmatic ad partners fetches an advert. When the ad is successfully viewed, Verasity is paid. As the viewability and engagement are higher from Verasity’s rewarded ad formats, the advertiser is happy and sees a higher performance from the advertising. The more viewers who join the Verasity
network, the more the revenue.
The use case of the actual token looks fine.
However, on closer inspection of Verasity themselves and how they earn their money I found the following:
Verasity has built a fully functional Tournament site called The Esports Fight Club. This generates revenue for Verasity through its pay to play and subscription membership packages. In addition, Verasity takes a rake on the total jackpots’ values rewarded in Tournaments. The tournament aspect involves tournaments that players pay to enter. This contribution goes towards the prize pool. Verasity takes a comission of this prize pool.
I followed up with the admin team for verasity and found regarding where the money for tournaments currently come from:
Hi Jamal, this mostly depends on the type of tournament. During big tournaments, for example, the prize pool is defined by third parties and sponsors. On the other hand, EFC is sponsoring every partner’s small community tournaments that are active on the website with or without entry fees. As we are focusing on adoption and loyalty, most of our tournaments are Free-to-join at the moment.
I understand that having pay to play competitions is considered impermissible in Islam if the money in the prize pool comes from the players. Does this make it impermissible to buy and hold the verasity token for investment purposes? Verasity Whitepaper
JazakAllah Khair
Please note that we don’t screen tokens on this forum. We have our IFG Halal Crypto List (https://www.islamicfinanceguru.com/crypto/), where we share our own sharia screening of the top 50 cryptocurrencies. Check it out!