racheliz3690
New member
It is a two part question. Would be good if someone with knowledge has the answers.
1) is liquidity providing in a decentralized exchange halal or Haram. A simplified example of this would be you want to provide liquidity on a decentralized exchange. Let's say coinA and coinB. You provide liquidity in equal amount generally so could be $1000 of coinA and $1000 of coinB. This is used for the purpose of people trading from coinA to coinB or reverse. As the liquidity provider you own a percentage of that pool so maybe 1% of the total liquidity. The money you make if from the fees the dex provides so for someone wanting to convert CoinA to coinB they pay have 3% fee which goes into the pool. I don't see it as lending or borrowing as you are not lending or borrowing the money it is yours you are just providing a service for people to be able to do swaps on the exchange for a fee.
2) if part one is classified as Haram would it be ok to "invest" in a cryptocurrency that provides other services not related to liquidity. but also provides liquidity as an organisation on behalf of it investors from which you receive profits for holding the coin.
If you need clarification regarding any of the above questions I will try my best if you let me know
1) is liquidity providing in a decentralized exchange halal or Haram. A simplified example of this would be you want to provide liquidity on a decentralized exchange. Let's say coinA and coinB. You provide liquidity in equal amount generally so could be $1000 of coinA and $1000 of coinB. This is used for the purpose of people trading from coinA to coinB or reverse. As the liquidity provider you own a percentage of that pool so maybe 1% of the total liquidity. The money you make if from the fees the dex provides so for someone wanting to convert CoinA to coinB they pay have 3% fee which goes into the pool. I don't see it as lending or borrowing as you are not lending or borrowing the money it is yours you are just providing a service for people to be able to do swaps on the exchange for a fee.
2) if part one is classified as Haram would it be ok to "invest" in a cryptocurrency that provides other services not related to liquidity. but also provides liquidity as an organisation on behalf of it investors from which you receive profits for holding the coin.
If you need clarification regarding any of the above questions I will try my best if you let me know