Dai (DAI) - Generally Not Permissible
Dai (DAI) is classified as "Generally Not Permissible" based on scholarly analysis of its underlying technology, use case, and compliance with Islamic financial principles.
Shariah Assessment
DAI is an algorithmic stablecoin backed by collateralized debt positions. Stability fees (interest) are charged on CDP loans. MakerDAO has also invested DAI collateral in US Treasuries and other interest-bearing instruments.
While DAI's decentralized nature is notable, the underlying mechanisms involve interest-bearing instruments and lending.
Scholarly References
- Same concerns as MKR/Maker system — see MKR entry
- ISRA (algorithmic stablecoins with interest mechanisms are problematic)
Last reviewed: December 1, 2024
Frequently Asked Questions
Is Dai (DAI) halal to invest in?
According to scholarly analysis, Dai (DAI) is classified as "Generally Not Permissible". DAI is an algorithmic stablecoin backed by collateralized debt positions. Stability fees (interest) are charged on CDP loans. MakerDAO has also invested DAI collateral in US Treasuries and other interest-bearing instruments.
What do scholars say about investing in Dai?
Key scholarly references include: Same concerns as MKR/Maker system — see MKR entry; ISRA (algorithmic stablecoins with interest mechanisms are problematic). While DAI's decentralized nature is notable, the underlying mechanisms involve interest-bearing instruments and lending.
Is cryptocurrency investing halal in Islam?
Cryptocurrency investing is a topic of scholarly debate. Some scholars permit it as a form of digital property, while others express concerns about speculation (gharar). The permissibility often depends on the specific cryptocurrency's use case, backing, and whether it involves prohibited elements.
Do I need to pay Zakat on Dai?
If you hold Dai as an investment and your total holdings exceed the Nisab threshold, Zakat is generally due at 2.5% of the market value. Use Mizaan's Zakat calculator to compute your obligation based on your specific madhab.