An ethical decentralized finance (DeFi) platform is working on bringing to market a blockchain marketplace for Islamic non-fungible tokens (NFTs).
DeFi for Muslims
The marketplace, currently being developed by Marhaba Decentralized Financial Platform (MDFP) and to be built on the Binance Smart Chain, is designed to encourage and promote Islamic arts and contemporary calligraphy. It will be a ‘no-code’ platform to enable the creation of NFTs, allowing artists to create and upload their artwork to the app, which will then be converted into an NFT using smart contracts.
MDFP, based in Australia, is also planning to roll out a Shariah compliant digital wallet, an investment product as well as financing products over the next 12–18 months, Founder and CEO Naquib Mohammed told IFN Fintech. Naquib, who founded MDFP to meet the unmet demand of Muslims for Shariah-certified DeFi products, launched the start-up mid-pandemic after nine months of laying the groundwork.
The e-wallet, to be branded Sahal Wallet, is a non-custodial wallet which will filter Shariah- screened tokens and NFTs to be stored, transacted and managed by the user. The wallet will encompass Shariah-governed DeFi functionalities to enable users to participate in charity and Zakat, all in crypto format.
The financing product will comply with Shariah principles and be backed by NFTs. The investment instrument will take the form of yield maximizer buckets with each bucket following different strategies. The first bucket will invest in Shariah compliant native tokens of promising apps built on the Ethereum ecosystem while the second bucket will gain exposure to Shariah compliant ERC-20 tokens in the DeFi space.
The start-up has formed an internal Shariah board to ensure the Shariah integrity of its products and will be engaging external Shariah advisors for independent audits.
Australia over Malaysia
Domiciling its operations in Australia was motivated by Australia’s robust regulated cryptocurrency industry, Naquib said. Leading Islamic finance hubs such as Malaysia were considered for their Islamic finance stature and ecosystem; however, blockchain and crypto acceptance and development were the deciding factors when it came to incorporating MDFP.
“The Islamic fintech ecosystem is projected to grow to US$128 billion by 2025 at [a] 21% cumulative annual growth rate. Our effort is to put Australia on the map of Islamic fintechs,” said Harly Zappino, a legal advisor and partner at Neo Legal, the law firm engaged by MDFP. “After the legalization of cryptocurrency in 2017, Australia has become one of the industry leaders within the fintech community with its well-regulated and established laws related to the issue of crypto assets.”
MDFP has begun fundraising efforts to support its projects: it is currently conducting a private token sale, the first of three, with a public offering of its $MRHB slated for August. Funds raised will be channeled toward marketing, research and development as well as ecosystem development.