Authored By
· Dr Farrukh Habib — Chairman of the SGB, MRHB DeFi
· Mufti Billal Omarjee — Member of the SGB, MRHB DeFi
· Dr Muhammad Abdullah — Member of the SGB, MRHB DeFi
CONTENTS
1. Introduction
MRHB DeFi is aiming to develop a complete ecosystem of different financial products that are shariah compliant. Being the first shariah compliant DeFi project in the world, the challenging task of complete and comprehensive shariah compliance of the project has been vested upon the Shariah Governance Board (SGB). It is just not a challenge to understand — or decrypt — the existing crypto and DeFi system, products, and services, but also to implement shariah principles and fiqh rulings without any precedent and existing fiqh literature on the topic. It requires a pure ijtihadi approach to achieve this goal. The SGB has taken up this challenge of not only doing thorough research, but also innovatively implementing fiqh rulings on the DeFi products and services.
MRHB DeFi is a startup and requires funds to fuel its expenses and operations. To raise funds, it decided to offer MRHB tokens that would be minted in the future, however, the token sale must be shariah compliant as well. There is no existing fiqh literature on the future sale of tokens, or even sale of tokens in general. Being the first of its kind project in the Islamic Finance ecosystem, there is no previous actual case of shariah compliant future sale of tokens. Therefore, the SGB has decided to do a thorough research and suggest an innovative — first in the world — shariah compliant solution of the issue in hand.
Due to the innovative shariah compliant aspect of future sale of MRHB tokens, many shariah scholars, Islamic economists, Islamic finance experts and others found it complex. They raised various questions and showed interest in further learning the shariah conceptual basis of the future sale of MRHB tokens and how it has been implemented. This paper has been written by the SGB to answer their questions and to show the deep thought process of bridging the gap between classical fiqh rulings and the highly advanced phenomenon of crypto and DeFi. It is hoped to be a valuable research work added in the current body of knowledge of fiqh as well as crypto and DeFi. Hence, it will serve as the main reference point on this issue and for other crypto and DeFi projects.
2. The Concept of Mal in Islam and MRHB Token
2.1. What is property/asset (mal, مال) in Islam?
According to the famous classical Arabic dictionary ‘Lisan Al-Arab’, the literal meaning of the Arabic term ‘mal ‘(مال) is something which can be owned/possessed (Ibn Manzur, 1975). However, Muslim jurists differ in defining mal from the fiqh perspective. Hanafi scholars define mal in a different manner from other jurists. For example, Al-Haskafi, a Hanafi scholar, says:
والمراد بالمال عين يجري فيه التنافس والابتذال
The meaning of ‘mal’ is a physical good that [people] are inclined towards and is capable of being spent [transferred or exchanged]. (Al-Haskafi, 1998, vol. 3, p. 4)
This definition confines mal into only physical goods or tangible commodities. However, Usmani (2015) argues that this is the view of classical Hanafi scholars, contemporary Hanafi scholars also consider intangible assets as mal. For instance, Ibn Abidin (1992), a Hanafi scholar, states:
الْمُرَادُ بِالْمَالِ مَا يَمِيلُ إلَيْهِ الطَّبْعُ وَيُمْكِنُ ادِّخَارُهُ لِوَقْتِ الْحَاجَةِ، وَالْمَالِيَّةُ تَثْبُتُ بِتَمَوُّلِ النَّاسِ كَافَّةً أَوْ بَعْضِهِمْ
“The meaning of ‘mal’ is [something which] the [human] nature inclines towards, and its storage is possible at the time of necessity. The value [of something] is established by people’s [giving] worth [to it, when they consider it as worthy], either all of them or few of them [consider it as valuable].” (Ibn Abidin, 1992, vol. 4, p. 501)
In this Definition, there is no condition of mal being tangible asset or physical good. Moreover, in some cases, even the classical Hanafi scholars allowed sale of rights of tangible assets, for instance, they allowed sale of the right to pass (حق المرور).
Regardless, majority scholars (Malikis, Shafis and Hanbalis) do not put this condition, and they opine that mal refers to anything that has value and be compensated for if it is destroyed (Al-Zuhayli, 2010). For example, Al-Suyuti (1983) quotes the definition of mal from Imam Shafi that mal refers to something which has value, is used as consideration in trade, must be compensated for if destroyed, and that people do not consider it as valueless.
Therefore, it can be construed that the main features of mal from fiqh perspective are:
· It has a commercial value; this feature encompasses other qualities as well, like due to its commercial value people will not consider it valueless, it is eligible to be the subject matter of an exchange transaction/trade.
· It can come under one’s ownership; this includes the quality that if it is destroyed by someone then the owner has a right to be compensated for it.
· It can come under one’s possession; this relates to the control over the subject matter.
· It can be stored; subsequently, it can be used at the time of necessity.
The second difference between Hanafis and non-Hanafi scholars in the definition of mal is that Hanafis classify mal into mutaqawwam (legitimately valuable) and ghayr-mutaqawwam (illegitimately valuable). Ibn Abidin (1992) says:
وَالتَّقَوُّمُ يَثْبُتُ بِهَا وَبِإِبَاحَةِ الِانْتِفَاعِ بِهِ شَرْعًا؛ فَمَا يُبَاحُ بِلَا تَمَوُّلٍ لَا يَكُونُ مَالًا كَحَبَّةِ حِنْطَةٍ وَمَا يُتَمَوَّلُ بِلَا إبَاحَةِ انْتِفَاعٍ لَا يَكُونُ مُتَقَوِّمًا كَالْخَمْرِ، وَإِذَا عُدِمَ الْأَمْرَانِ لَمْ يَثْبُتْ وَاحِدٌ مِنْهُمَا كَالدَّمِ
Meanwhile legitimate value [of something] is established by its [commercial] worth and its permissibility to benefit from it in shariah. Hence, whatever is permissible [to benefit from in shariah] without any commercial value is not mal, e.g., a single grain of wheat; and whatever is valuable without permissibility of usage is not a valid asset either, e.g., wine; if both the elements [commercial value and permissibility] are absent [in something], then both cannot be established [to prove it as mal], e.g., blood.”
On the contrary, the majority scholars consider that Islamic legal permissibility is the default condition for anything to have commercial value. They do not differentiate between legitimately valuable and illegitimately valuable assets. However, Hanafis’ classification seems to be appropriate, because there are impermissible things, like wine and pork, that have commercial value for non-Muslims, but they are impermissible to use or benefit from for the Muslims. So, this classification can be applied on crypto assets as well.
It is crucial to note that mal ghayr-mutaqawwam is usually something which is intrinsically impermissible. In other words, that thing is either prohibited itself due to its nature — for example, wine, pork, etc. — or fundamentally contains an element which is prohibited — for example, blood is considered as impure in shariah. However, something does not become mal ghayr-mutaqawwam due to external factors. For example, if someone steals an apple, it is not permissible for the thief to consume — or benefit from — it, not because the apple is mal ghayr-mutaqawwam, it is still considered mal mutaqawwam, but because it was acquired through illegal means by the thief. On the contrary, mal ghayr-mutaqawwam even if acquired through legal means is still impermissible to benefit from in shariah. For example, if a Muslim buys wine with his/her halal money, he/she still is not allowed to use or consume it, because it is mal ghayr-mutaqawwam.
2.2. MRHB Token as an Asset (Mal)
MRHB DeFi is a shariah compliant ecosystem of decentralized finance based on blockchain. Details of the whole ecosystem and its products can be found in the MRHB DeFi whitepaper and the Shariah Green paper. The MRHB DeFi ecosystem uses MRHB token ($MRHB) as its native asset.
The MRHB token is a digital crypto asset that will be initially minted on the Binance Smart Chain (BSC), with a total supply of 1 billion tokens. Each MRHB token is capable of being owned, as they exist in the form of unique and separately identifiable units on the blockchain; in this way, they are distinguishable among each other. Therefore, ownership can be established on them. They can be digitally stored on e-wallets or crypto-wallets that are compatible with ERC20 tokens. Moreover, a separate wallet, called Sahal Wallet, is also available in the MRHB DeFi ecosystem to receive, send, store, exchange, and spend those tokens while interacting with the whole ecosystem. They can also be owned, stored and exchanged through a compatible hardware wallet, and can be used at the time of necessity.
Ibn Abidin (1992) in his definition of mal — mentioned above — states that it is not necessary for something to qualify as mal that all the people should consider it valuable. Even if a group of people considers that it has value, the requirement is fulfilled. In the case of MRHB token, a community of hundreds of people has shown inclination towards it and the project behind it and has spent their hard-earned money to own this token at different price levels. In this way, it can be said that this token has a commercial value in the view of its community. Therefore, MRHB token fulfils the basic criteria of being mal.
As for the discussion, whether this token is mal mutaqawwam or ghayr-mutaqawwam, it is noted that it is a type of utility token in nature as it has certain Shariah compliant benefits (منافع) in the form of discounts for various fees that will be implemented to use the MRHB platform. It also grants access to certain products and services of the MRHB DeFi ecosystem and unlocks certain features which are not available to the users of different crypto assets at the platform. It will also give its holder a right to vote (as a governance token). It will also serve as a payment token within the system for certain products, services, and features.
The main source of value for this token would be its usage for halal products, services and features and its utility in the MRHB DeFi ecosystem. Moreover, the token is designed and issued in a way that it specifically avoids any prohibited elements, i.e., Riba (interest), Gharar (excessive uncertainty), Maysir (gambling), etc. Since, there is no intrinsic impermissibility that can be found in the token, it is considered as mal mutaqawwam.
One may ask that since the value of MRHB token depends on the MRHB DeFi ecosystem, what is the value or contribution of the ecosystem in the society or economy. For the overall value / benefit that MRHB DeFi ecosystem brings to the society or economy, it can be better understood by reading the whitepaper, Shariah Green paper, litepaper, and the information available on the official website.
2.3. Virtual/Digital Nature of MRHB Tokens
As mentioned earlier, MRHB tokens are a form of digital asset, they are intangible or virtual assets. They do not have corporeal form (ayn, عين), due to this feature, some shariah scholars consider that they are non-existent (madoom, معدوم) or imaginary. Since a non-existent thing cannot become mal or subject matter of an exchange from fiqh perspective, it is not allowed to exchange those tokens.
This argument is flawed, because there is a huge difference between non-existent things and intangible things. Electricity and mobile airtime are also an intangible form of assets, but it does not mean that they do not exist. Similarly, MRHB tokens will exist on the blockchain platform. They can be created, stored, transferred, owned, possessed, spent and destroyed; that is why, it can be said that they have existence that is digital or virtual. However, the question is whether shariah recognizes intangible assets as valid or not. The answer is that shariah recognizes intangible assets as mal mutaqawwam. Classical and contemporary scholars, regardless of their school of fiqh, allow sale of benefits, rights and usufruct in one way or another. Internationally recognized contemporary shariah authorities, like Islamic Fiqh Academy of the Organization of Islamic Cooperation (OIC) and Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI), have also resolved that intangible or virtual assets are property of inherent monetary value that entitles them to legal protection and that any violations of property rights associated with them are punishable (IDB & IFA, 2000, Resolution №43 (5/5); AAOIFI, 2015, Article no 3/3/3/1). In the same vein, intangibility of MRHB tokens does not affect their shariah ruling.
2.4. MRHB Token — Currency or Utility?
MRHB tokens have not been issued yet[1], they will be issued on the public launch date, hence they are not currently in circulation now. The literature produced by MRHB DeFi regarding the MRHB token shows that it is a utility token, and it will have some features of payment at the platform. The buyers currently cannot use the tokens either as a currency (payment), discount or even utility. The tokens represent future utility or benefit at the MRHB DeFi platform attached to them, and they are initially being offered as such at this stage. In the future, when the tokens are released, and the platform is developed where the tokens — or their utility — can be used, they will also be used as mode of payment. In this way, they will become a hybrid of utility and payment token. But now, they cannot be used for payments as a medium of exchange, store of value or unit of account, hence, they can be in no way considered as a form of currency or payment in their current form.
3. Bai Salam and MRHB Future Token Sale
3.1. What is Bai Salam?
Bai Salam or salaf literally means forward sale. In fiqh, it is the sale of a deferred item in exchange for an immediate (spot) price. In other words, it is the sale of a liability whose characteristics are described in exchange for a price or capital-sum paid in advance (Al-Zuhayli, 2010).
Al-Zuhayli (2010) further explains that the conditions of a Bai Salam may pertain to the price or to the object of sale. All the schools of fiqh agree that Bai Salam is valid if six conditions are met:
(1) the genus of the object of sale is known
(2) its characteristics are known
(3) its amount is known
(4) the term of deferment is known
(5) the price is known, and
(6) that the place of delivery of the object of sale is specified if its transportation/transfer is costly.
3.2. Is Bai Salam Restricted to Only Agricultural Produce?
عَنِ ابْنِ عَبَّاسٍ ـ رضى الله عنهما ـ قَالَ قَدِمَ رَسُولُ اللَّهِ صلى الله عليه وسلم الْمَدِينَةَ، وَالنَّاسُ يُسْلِفُونَ فِي الثَّمَرِ الْعَامَ وَالْعَامَيْنِ ـ أَوْ قَالَ عَامَيْنِ أَوْ ثَلاَثَةً. شَكَّ إِسْمَاعِيلُ ـ فَقَالَ “ مَنْ سَلَّفَ فِي تَمْرٍ فَلْيُسْلِفْ فِي كَيْلٍ مَعْلُومٍ، وَوَزْنٍ مَعْلُومٍ ”
Narrated Ibn Abbas: Allah’s Messenger (ﷺ) came to Medina and the people used to pay in advance the price of fruits to be delivered within one or two years. (The sub-narrator is in doubt whether it was one to two years or two to three years.) The Prophet (ﷺ) said, “Whoever pays money in advance for dates (to be delivered later) should pay it for known specific weight and measure (of the dates). (Sahih Al-Bukhari, Book 35, Hadith 1)
Bai Salam was allowed as an exception to the prohibition of sale on the ground that it performed an important social function in the context of farmers during the times of the Prophet (ﷺ) to finance their pre-cultivation expenditures. However, it was allowed in its entirety, as a complete mode of sale, without restricting it to the farmers of that time. The structure of the Bai Salam is indeed useful for farmers in securing funds to grow crops, and that was the triggering event to allow such sale. But the social aspect in the farmers’ case should be deemed as the general wisdom/benefit for other cases — for example merchants, traders, manufacturers of industrial goods, or providers of services — as well. Moreover, Bai Salam is allowed based on the farmers’ incidence mentioned (above) in the hadith, however, it is only a wisdom behind allowing such a sale, not the effective cause of the shariah ruling of its permissibility. The fiqh / shariah rulings are derived based on the effective cause and not based on wisdom, because such wisdom or advantages may change due to change in time and even region. That is why Muslim jurists have never restricted the usage of salam to cultivation of crops only. Al-Zuhayli (2010) mentions all the Muslim jurists agree that Bai Salam is not confined to the agricultural produce, but it is permissible for all commodities measured by volume, weight, length, or number of similar items (e.g., nuts, eggs, etc.).
AAOIFI (2017) also mentions:
Salam contracts are permitted for fungible goods, like those that may be weighed, measured, or counted, the articles of which do not differ in any significant manner, provided that no Riba ensues. (Shariah Standard №10, 3/2/1)
Therefore, we consider the Bai Salam contract for the future sale of MRHB tokens is appropriate.
3.3. MRHB Token and the Six Conditions of the Salam Subject Matter
“Since the subject matter of Bai Salam can be non-agricultural produce, MRHB token can also become the subject matter of Bai Salam.”
In this case, the genus of the object of sale is known to the parties — that is a crypto digital token structured on ERC20 standards on Binance Smart Chai (BSC). Its characteristics — the underlying source of value, benefits, usufruct, rights attached to the token, issuance process, listing on exchanges, its usage, distribution, and circulation — are known to the parties through the information provided in the official documents, i.e., ecosystem whitepaper, Shariah Green paper, litepaper, website and conveyed through official communication channels. Its amount — how much a buyer gets at a certain price — is clearly made known to the buyers (rabb al-salam, رب السلم). The term of deferment and the delivery date is known to the buyers mentioned in the simple agreement for future tokens (SAFT). The SAFT is signed by all the buyers individually. The price is known to the buyers in terms of how much they pay for what quantity or number of tokens to be delivered to them. It is also known to the buyers that they will receive MRHB tokens in their designated wallet addresses.
3.4. Bai Salam for Future Utility / Benefits
The classical Hanafis opine that it is not permissible for either the Bai Salam capital (ras al-mal, رأس المال) or the subject matter (muslam fih, مسلم فيه) to be a benefit, utility, or usufruct. Because the benefits are not considered mal in their view since benefits are not capable of being stored, used at the time of necessity and measured in terms of weight and volume. Benefits or usufruct can only be utilized at a specific time, and they vanish when the time finishes (Al-Maktaba Al-Shamelah Al-Hadithah, 2021, vol. 1, p. 855).
However, we have already discussed — in the discussion of mal — that this is the view of classical Hanafis. The contemporary Hanafi scholars, Malikis, Shafis and Hanbalis view benefits, usufruct, rights and other intangible assets as mal. Because of this reason, they allow benefits and other intangible assets to be either the capital of Bai Sala or the subject matter. It is stated:
And then it is permissible according to most of the scholars to have a benefit as the capital of Bai Salam, as if someone says: I allow you to live in my house this year, or to serve me for a month, or to teach me a specific surah of the Quran, for a specific term, then Bai Salam is correct. It is also permissible for a benefit to be the subject matter of Bai Salam, such as someone says: I give you twenty dinars for teaching me a specific surah of the Quran after a month, or for a specific benefit that you owed me for a specific term, then Bai Salam is correct. (Al-Maktaba Al-Shamelah Al-Hadithah, 2021, vol. 1, p. 855–856)[2]
It is mentioned — above — that MRHB token is a type of utility token whose benefit and utility will be available in the future to the buyers. Therefore, it is correct for the MRHB token to be considered as the subject matter of Bai Salam based on the opinion of the majority of the scholars.
3.5. The Issue of Non-Existence of the Subject Matter at the Time of Bai Salam
There is a difference of opinion among the Muslim jurists on whether it is a condition for Bai Salam to be valid that the subject matter must exist while concluding Bai Salam or not. Hanafis, Imam Al-Thawri, and Imam Al-Awzai opine that it is a condition for the validity of Bai Salam (Ibn Rushd, 2004, vol. 3, p. 220). They put a condition that the genus of the subject matter of Bai Salam must exist in the market in the specified type and characteristics continuously from the contract time until the delivery time, and where it cannot be imagined becoming unavailable (e.g., grains).
Thus, if the subject matter of Bai Salam does not exist at the time of contract or the time of delivery, or if it becomes unavailable in the interim (e.g., fruits, milk, etc.), then Bai Salam is not permitted. In this regard, the ability to deliver the subject matter may be put in doubt if it is not available at any such time, while its availability in the market establishes its deliverability. In short, this condition is stipulated to guarantee that the subject matter of Bai Salam will be delivered (Al-Zuhayli, 2010; Usmani, 2008).
On the contrary, Malikis, Shafis, Hanbalis, Imam Ishaq, and Imam Abu Thawr do not stipulate that (Ibn Rushd, 2004, vol. 3, p. 220’ Usmani, 2008).[3] They hold that Bai Salam is valid even if the subject matter is non-existent at the time of the conclusion Bai Salam. They stipulate that the subject matter be generally existent, and very unlikely to vanish, only at the time of delivery, regardless of whether it existed at the contract time. In this regard, they argue that what matters is the deliverability of the subject matter, thus only the time of delivery should be considered. To support their opinion, they state that the Prophet (ﷺ) arrived in Madinah and found the merchants trading in fruits with one and many years through Salam contract, then he said: Whoever engages in a Bai Salam, let him specify a known volume or weight, and a known term of deferment. Thus, he (ﷺ) did not make it a condition that the subject matter must exist at the time of Bai Salam. If such a condition had existed, he (ﷺ) would have mentioned it, and he would have forbidden them from engaging in Bai Salam of two years term, since the fruits will clearly fail to exist in the middle of the year. The second opinion is preferable. If the time of delivery of the subject matter of Bai Salam arrives, and if it is not available at that time, then the buyer has the option of waiting until it is available, or to void the sale and take back the price. (Al-Zuhayli, 2010)
3.6. Is There Riba in Bai Salam for MRHB Tokens?
It is a condition for Bai Salam that the exchange of capital and subject matter would not fall under riba prohibition. It means that they should not both be measured by volume or weight, and they should not be of the same genus. If this condition is not met, then it would render the Bai Salam inclusive of riba. Thus, if the capital and subject matter of a Bai Salam are different (e.g., wheat for money) then Bai Salam is valid. In other words, if the two compensations are measured by different means, and if they are of different kinds, then the Bai Salam is valid. Malikis expressed this condition as the capital and subject matter of a Bai Salam must be of different genera in a manner that permits deferring one. Thus, it is not permissible to have Bai Salam of gold for silver since that would constitute riba. Similarly, it is not permissible to conduct Bai Salam of food in compensation for other food. However, it is permissible to do Bai Salam in animals for gold and silver, regular goods for food, and regular goods for other regular goods (Al-Zuhayli, 2010).
In the case of Bai Salam of MRHB tokens, the capital is collected in the form of stablecoins, mostly in USDT and USDC. On the other hand, MRHB token — as mentioned above — is structured as a utility token. Therefore, it is clear that the capital and subject matter of Bai Salam belong to different genera — capital is cash money and the subject matter is future benefit. Moreover, through the SAFT of MRHB tokens sale, the price and the number of tokens — that are to be delivered to the buyer — are also locked to ensure that there is no room for riba in the transaction.
4. What If MRHB DeFi Fails to Deliver MRHB Tokens?
Since the MRHB tokens will be delivered at a future date, in that sense they are a digital representation of the future utility. One may ask the question of “what will happen if MRHB DeFi fails to deliver the tokens on the delivery date, or if MRHB DeFi as a project fails to deliver the utility it promises?”. In this case, various measures can be considered based on different circumstances in consultation and agreement with the buyers.
4.1. Extension of the Date of Delivery
“If MRHB DeFi is not able to meet the delivery date, there is some delay from the actual delivery date in the issuance of MRHB tokens, or MRHB DeFi fails to perform its obligation, owing to insolvency, it should be granted an extension of time for delivery.”
This is in accordance with AAOIFI, 2017, Shariah Standard №10, 5/6.
In the case where there is a delay in the delivery of the MRHB tokens to the buyers, MRHB DeFi will not pay any penalty to the buyers, because it is not permitted to stipulate a penalty clause in respect of delay in the delivery of the subject matter of Bai Salam. This is in accordance with AAOIFI, 2017, Shariah Standard №10, 5/7.
4.1.1. The Actual Case of Extension of the Date of Delivery
The initial schedule for the issuance of MRHB tokens was set to be 15 October 2021, and the SAFT (Bai Salam agreement of MRHB tokens) mentioned the same date. 23 buyers contracted the SAFT to receive MRHB tokens at the said date and transferred capital of Bai Salam to MRHB DeFi — on the spot payment basis. Due to further expansion plans in the MRHB DeFi ecosystem in the form of incorporating new ideas, refining the existing product and services concepts, improving tech-development, increasing partnerships and collaborations, and further strengthening the fundamentals of the project, it was decided by the management of MRHB DeFi in the first week of September to extend the delivery date of MRHB token release to 7 December 2021.
Once the extension of the date of delivery was decided, the investor relations team of MRHB DeFi contacted the buyers through a blend of direct phone calls and investor update emails to communicate the new date of issuance of MRHB tokens. MRHB DeFi offered the option of cancellation of the SAFT and refund the full payment if a buyer does not agree to the new date. However, none of them asked for a refund and they all consented to the new date. It is prudent to do so on the buyers’ side because it was also beneficial for them. Since the extension of the date was due to the further improvement in the overall project, this can be seen as the increased utility of the MRHB token. In this way, the buyers would expect to receive a superior subject matter of Bai Salam for an extension of the date, for the same price they had initially paid.
4.2. Cancellation (Iqalah) of Bai Salam
It is permissible, when both parties — a buyer and MRHB DeFi — agree, to cancel the entire Bai Salam of MRHB token in return for repayment in full of the amount of the capital of Bai Salam. It is also permissible to do partial cancellation, that is, cancellation of the delivery of part of MRHB tokens, in return for repayment of a corresponding part of the capital of Bai Salam, however, this is also based on mutual consent of both parties. This is in line with the AAOIFI, 2017, Shariah Standard №10, 4/3.
5. Wisdom of Bai Salam and MRHB ITO[4]
“The wisdom of choosing Bai Salam for the future sale of MRHB tokens lies in the fact that Bai Salam facilitates a type of financing for people in need of it.”
Although farmers’ case was particular in allowing Bai Salam from the Islamic fiqh perspective, it is generally beneficial for traders, merchants, manufacturers, and service providers who need working capital for their businesses and for their expenses. Hence, Bai Salam is made permissible so that these businesses may benefit from it.
Similarly, MRHB tokens future sale is structured based on Bai Salam to raise funds for the MRHB DeFi ecosystem, where it intends to offer various shariah compliant blockchain-based financial products. For MRHB DeFi to be productive and deliver what it intends, it needs working capital in the form of either cash or assets. Hence, Bai Salam has provided a shariah compliant structure for the future sale of MRHB tokens for raising funds; and on the other hand, an investment opportunity in the form of financing the project for the buyers. In this way, Bai Salam has provided an efficient shariah structure to fulfil the need for the liquidity of MRHB DeFi, on the one hand. On the other hand, the buyers of MRHB tokens may also benefit from the usage of Bai Salam for MRHB tokens future sale, because they are able to acquire the tokens at a good discount — a price below the market (public sale) price.
“The objective of MRHB DeFi is to bring Islamic legal rulings, ethical principles, and social values in the DeFi space, and develop blockchain-based financial products for the benefit of the whole society and economy.”
To achieve this objective, MRHB DeFi is offering tokens that will be delivered in the future. The Shariah Governance Board (SGB) of MRHB DeFi after thorough research and deep deliberation suggested that the future MRHB token sale can be structured based on the Islamic mode of forward sale — Bai Salam. Although it is a completely innovative idea — as there is no precedent of shariah compliant token sale, nor any research being done on this issue — it is an attempt to provide a shariah compliant solution of a very crucial and fundamental part of the crypto and DeFi world.
It is safe to say that as long as MRHB DeFi is able to fulfill the delivery of MRHB tokens and the utility behind them at the due date, it is hard to find an issue from the fiqh perspective in the terms of Bai Salam and future sale of MRHB tokens.
References
· AAOIFI (2017). Shari’ah Standards. Manama, Bahrain: AAOIFI.
· Al-Haskafi, A. (1998). Al-Durr Al-Muntaqa. Beirut, Lebanon: Dar Al-Kotob Al-Ilmiyah.
· Al-Maktaba Al-Shamelah Al-Hadithah. (2021). Kitab Fiqh Al-Muamalat: Al-Abhath, Al-Salam, Al-Maqood Alaih. Al-Maktaba Al-Shamelah Al-Hadithah [Digital Library].
· Al-Zuhayli, W. (2010). Fiqh Al-Islami Wa Adillatuh. Damascus, Syria: Dar Al-Fikr Al-Islami Gema Insani.
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[1] As of writing this paper on November 10th 2021
[2] حالة كون أحد البدلين أو كليهما من المنافع في السلم
اتجه الحنفية إلى أنه لا يجوز كون أي من البدلين في السلم منفعة، لأن المنافع لا تعتبر أموالا في مذهبهم، إذ المال عندهم) ما يميل إليه طبع الإنسان، ويمكن ادخاره لوقت الحاجة (م 126 من المجلة العدلية)، والمنافع غير قابلة للإحراز والادخار، إذ هي أعراض تحدث شيئا فشيئا وآنا فآنا، وتنتهي بانتهاء وقتها، وما يحدث منها غير الذي ينتهي.
وعلى ذلك فلا يصح جعل المنافع بدلا في عقد السلم عندهم.
وخالفهم في ذلك جمهور الفقهاء من الشافعية والمالكية والحنابلة الذي اعتبروا المنافع أموالا بحد ذاتها، وأنها تحاز أصولها ومصادرها، وهي الأعيان المنتفع بها.
ومن ثم جاز عندهم أن تكون المنفعة رأس مال، كأن يقول: أسلمت إليك سكنى داري هذه سنة، أو خدمتي شهرا، أو تعليمي سورة كذا، في كذا إلى أجل كذا، صح ذلك السلم. كما جاز أن تكون المنفعة مسلما فيه، كأن يقول: أسلمت إليك عشرين دينارا في تعليمي سورة كذا بعد شهر أو في منفعة موصوفة في ذمتك إلى أجل، صح السلم. https://al-maktaba.org/book/968/856
[3] وَأَمَّا اخْتِلَافُهُمْ فِي هَلْ شَرْط السَّلَمِ أَنْ يَكُونَ جِنْسُ الْمُسْلَمِ فِيهِ مَوْجُودًا فِي حِينِ عَقْدِ السَّلَمِ: فَإِنَّ مَالِكًا، وَالشَّافِعِيَّ، وَأَحْمَدَ، وَإِسْحَاقَ، وَأَبَا ثَوْرٍ لَمْ يَشْتَرِطُوا ذَلِكَ، وَقَالُوا: يَجُوزُ السَّلَمُ فِي غَيْرِ وَقْتِ إِبَّانِهِ. وَقَالَ أَبُو حَنِيفَةَ وَأَصْحَابُهُ، وَالثَّوْرِيُّ، وَالْأَوْزَاعِيُّ: لَا يَجُوزُ السَّلَمُ إِلَّا فِي إِبَّانِ الشَّيْءِ الْمُسْلَمِ فِيهِ.
[4] Initial Token Offering or ITOs are very similar to initial coin offerings (ICOs) — and the two terms are often used synonymously. he focus of ITOs usually centers on offering tokens that have proven (or unproven) intrinsic utility. This could include granting investors access to a platform through a subscription, with token holders unlocking the right to use exclusive services within an ecosystem.
