DeFi enhanced with the concept of Islamic Finance
Islamic Finance DeFi’s objective is to bring Shariah-compliant solutions to the DeFi ecosystem to provide a reliable and transparent platform for the Muslim World in order to help them benefit from this emerging financial evolution. Furthermore, propose Shariah financial solutions to the non-Islamic societies. Shariah financial solutions, focusing on the financial health of society as a whole and working around aggressive derivatives and unsteady high interest rate loans, offer a more stable and less volatile products for the benefit of non-Islamic societies. We propose to create alternative and divergent revenue methods compliant with the Islamic Financial thought.
What makes Islamic banking different?
One key variation is that traditional banks earn their money by charging interest and fees for services, whereas Islamic banks earn their money by profit and loss sharing, trading, leasing, charging fees for services rendered, and using other sharia contracts of exchange (Sultan,2019). There are potentially significant benefits from Islamic policies and practices that facilitate subtle implementation and help coordinate behavioural interventions.
Advantages of Islamic Finance
🔷 Enhancing financial inclusion
🔷 Reducing the impact of harmful products and practices
🔷 Encouraging stability in investments
🔷 Socially responsible investment
🔷 Win-win for both the borrower and the lender
“If we can increase the share of Islamic Finance for the world, countries can benefit”
-Najib Rasak, Former Prime Minister of Malaysia
Importance of Islamic Finance
It plays an important role in economies: creating jobs and generating income, promoting economic growth, social stability and contributing to the development of a dynamic private sector.
“ We all have better understanding of the risks and role of Islamic finance now, Islamic Finance is growing in importance for the global economy, it is therefore important that international financial institutions consider questions related to integrating Islamic Finance into the global finance”
-Wolfgang Schäuble , Former Finance minister of Germany
There are many reasons for investing and a wide variety of expectations by investors, some more realistic than others. Logically one expectation of investment is that the value of capital is maintained or increased. So the investment return must at least be equal to the inflation rate and the cost of investing, that is, management fees.
“ Our strength in Finance has led us to set up an international center with medium and long term objectives, especially to develop Islamic Financial and insurance services”
-Hassanal Bolkiah, Sultan of Brunei
Sultan, J., & Bechter, C. (2019). Big Data Analytics in Islamic Banking. International Academic Journal of Business Management. DOI:10.9756/iajbm/v6i1/1910003