Is Loopring (LRC) Halal or Haram?
Shariah compliance review of Loopring (LRC) by Islamic finance scholars at EthicalNode, with separate verdicts for trading and for staking.
Trading verdict: Non-Comfortable
LRC is the Ethereum-based cryptocurrency token of Loopring, an open protocol designed for the building of decentralized crypto exchanges. Many decentralized exchanges may involve non-Shariah compliant activities, and Loopring itself is one of them, because it provides "Leveraged ETH staking" which is a form of derivatives. It is recommended to avoid using LRC token.
Staking verdict: Non-Comfortable
Users do not participate in the consensus protocol. The 'LRC staking' instrument is presented on the official website as a risk-free investment, seemingly designed to maximize total value locked (TVL). However, this staking does not appear to add any value to the consensus protocol or provide liquidity to users. In this context, 'LRC staking' raises questions, as it involves locking assets for a specified period with a guaranteed reward, provided the assets are not withdrawn before the designated date. Additionally, it is not even akin to a farming pool, which incentivizes and rewards users for contributing liquidity to various decentralized exchanges (DEXs).<br><br>Given the conclusion for buying and selling LRC token in a "trading" section, any instrument that involves Loopring is to be avoided anyway, in addition to previous paragraph.
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