Barakah Finance - a shari'ah compliant DeFi ecosystem for the world's 2 billion Muslims, launching on Harmony, and disrupting Islamic Finance

Name of Project

Barakah Finance

Proposal overview

Barakah Finance is the world’s first shari’ah compliant staking and investment platform. Barakah Finance aims to disrupt the Islamic Finance industry by creating new and exciting DeFi products and services for the world’s 2 billion Muslims, many of whom adhere to the faith-based financial rules that do not allow usury/interest in the financial system, nor does it permit excessive speculation (in the aim of protecting the less well-off). For context, Islamic finance is a growing part of the international financial system with assets of $US 1.2 trillion, which represents approximately 1% of global banking assets. With an estimated annual growth rate of 10-15% it is likely to become an increasingly important financial market in the future, and at Barakah Finance we want to be at the heart of the Blockchain revolutions which powers Islamic Finance for the web 3.0. Just diverting 0.01% of Global Islamic Finance assets towards a shari’ah Compliant protocol for digital asset management would give a TVL of $US 120 million.

On Barakah Finance users will be able to stake tokens for shari’ah compliant rewards, and will also be able to take part in other approved investment and wealth-protecting products such as ‘takaful’ products (similar to Insurance products). We are lucky to have Dr Ziyaad Mahomed as one of our key team members, and our Shari’ah Advisor, who is currently the Chair of the Board of Scholars for HSBC Amanah in Malaysia, as well as being an Assistant Professor at INCIEF, the Global University of Islamic Finance (Kuala Lumpur, Malaysia).

. The rest of our team consists of:

  • Bryan Cho, a seasoned Blockchain Engineer and Developer who is our CTO;
  • Faisal Naru, Executive Director of the Policy Innovation Unit in the Nigerian Economic Summit Group (NESG) and part of Rockefeller Philanthropy Advisors. Faisal looks after Barakah Finance strategy.
  • Faraz Ahmed a Principal Transformation and Delivery Consultant with experience in Aerospace, Defence, Security & Technology and current COO of Barakah Finance
  • Mohammed Imran, co-founder of Funoon.io (world’s first faith-based NFT marketplace on the Binance Smart Chain) and award-winning social activist and business leader. Mohammed is the CEO of Barakah Finance.

We believe the Harmony blockchain perfectly represents our values of embracing diversity, and building a global web 3.0 ecosystem that takes into account different values and belief systems.

Proposal ask

We are requesting $50K in equity-free contribution: $10K after launching the world’s first shari’ah compliant and approved staking contract for Barakah Finance’s native HRC20 token (see whitepaper for details), BRKH onto test net; $10K after main net launch, $10K after forming a DAO for our community, $10K for after 1K users, and $10k after hitting a TVL of $250,000 within the Barakah Finance staking pools. As well as funding, we are looking for Harmony’s help with product development, fundraising, and talent recruit.

Metrics for success

Our milestones are:

  1. Weeks 1-8: shari’ah compliant staking contract complete and deployed onto testnet
  2. Weeks 9-11: Give beta access to Harmony community to test and give feedback
  3. Weeks: 12-14: Deploy to mainnet and ramp up marketing efforts
  4. Second month after launch: Form DAO
  5. Fourth month: Acquire 1k new users
  6. Fifth month: Reach TVL of $250,000

We believe these milestones will be slower than for some projects as we are actively marketing to audiences that have hitherto seen DeFi as inaccessible to them on account of their particular needs for a shari’ah compliant protocol.

External links

Website: https://www.barakah.finance/

White paper: Barakah Finance Team - Barakah Finance

Telegram: Telegram: Join Group Chat

4 Likes

I read about this last night and have been thinking about this all day today. I think there is a lot of potential here. With over 2 billion Muslims in the world, this idea is critical to the global adoption of DeFi. This will allow Harmony to become more inclusive and expand the cultural outreach of the community!

More inclusion = more success for all Harmonauts!

I am excited to be a part of this and can’t wait to see where this takes us! Let’s goooooo habibis!

2 Likes

Interesting proposal which i’m sure will have great potential in Indonesia also.

What led you to using Twitter as the metric for the Genesis rewards?

2 Likes

This will be one of the most exciting projects out there with clear cut goals and objectives. Islamic finance complements well with the conventional financial system within Malaysia’s financial system. Some mainstream institutions in Malaysia are already beginning to explore and offer DeFi products and services. This project will bring great benefits to Harmony.

2 Likes

Thank you for your support, yes we feel that the Harmony network is a perfect launchpad for more inclusive projects, and that Islamic DeFi will be a growing part of DeFi in the future. For some communities, mainstream Islamic Finance has not been able to offer an accessible enough product, and so with the advent of Islamic DeFi, we feel Barakah Finance could offer decentralised and accessible services.

Really good question!

To be honest, the Twitter example in the White Paper is an indicative way of providing a reward based on real term positive growth for the Protocol. We will test with Twitter using a decentralised oracle.

Once its all working, and we are launched on dexes we will have a more complex (and better) system for the ‘Community Reward’ based on the following:

The score of the Community Reward Index is a weighted sum of the following five sub-scores defined between zero (0) and one (1):

Bvolume : Barakah Finance Volume Score;
SBRKH : BRKH Token Score;
Sactivity: Barakah website Activity Score;
SDAO : DAO Engagement Score; and
Ssocial : Social Media Engagement Score.

The Community Reward Index will therefore be calculated as follows :
CI = 3 x Svolume + 2 x (SBRKH+ Sactivity) + SDAO + Ssocial

This will be reported on and updated on a weekly basis, via a live YouTube broadcast.

Any further questions then please let me know

thank you ONECelestial :slight_smile:

This is very interesting. Muslims are a minority in my country and the major banks here dont offer islamic finance. The financial industry have been encouraged by the government to do more but none has been done. So something like this if done well would be a great option.

1 Like

Great proposal. Alhumdulillah I am a Muslim and I know there will be massive supporters of this product. I am also member of several other active groups and will share your information there. Will look forward to the launch of the product.

Just a quick update. In line with the requirements for the Launches track we are creating a prototype staking mechanism that wil have shariah approval. We will provide a link to the test staking mechanism and information on the shariah approval by the end of the week. Any further questions then please do ask on this thread.

@Barakah thank you for a comprehensive proposal and promoting this to groups that are unbanked. Will Barakah Finance allow everyone to participate in the protocol?

Yes definitely, we will be inclusive, and the idea is to include more and more people into the wonderful world of web 3.0. We will be working to eradicate barriers :slight_smile:

We are Head Quartered in the UK, with tech development in the UAE and Shariah Advisory in Malaysia. We will take a global look at things and ensure that the protocol is open to all. We can look to bake this into our metrics/milestones too.

Regarding Financial Inclusion - please see here: ACE Members – Taj Bank Dr Ziyaad is Chairman of the Shariah Board at Taj Bank in Nigeria, and you can see Barakah Finance listed as one of the organisations he is the Chair of the Board for. Once this protocol is developed, we are primed for also launching many financial inclusion activities through our partnerships we can develop in emerging economies such as Nigeria. After much thought and deliberation, we feel Harmony is primed for global adoption and hence why we have selected to launch on Harmony vs Ethereum or a L2 chain.

@Barakah

According to the guidelines at Apply for Grants or DAO

Applications of each launch must have prototyped a feature-full product. Harmony helps incubate these founding teams with product development, fundraising, and talent recruit. We recommend a $50K equity-free contribution each:

$10K after launching a feature-complete product on our testnet $10K after forming a DAO with 5-out-of-9 multisig with our DAOs $10K after launching on our mainnet with audit $10K after 1K daily active users (with launch video, full PR promotion) $10K after 10k daily active users (with a detailed roadmap, governance process)

We recommend a 5-out-9 multisig account on Gnosis Safe with 3 governors from the project team, 3 governors from the project community, and 3 governors from Harmony DAOs – namely, ONEcommunityDAO, ONEdeveloperDAO, ONEincubatorDAO.

In all cases, we ask for 3-month exclusive campaigns with Harmony before more porting with other chains. We also offer follow-on investments – see 50 Investments ($20M) above; but, at the moment, you must have an outside, lead investor for us to match the funding terms. All codes, development materials and production assets must be fully open, preferrably with MIT or BSD licences; weekly updates must on sent on forum; and, all server deploys or mobile apps must be easily clonable.

Will the milestones and above guidelines work for you?

Thank you for the response on the inclusiveness. Still really curious what qualifies as “shari’ah compliant staking and investment” and " shari’ah compliant rewards". How does that apply to non-Muslims that are unaware of the shari’ah laws, being part of the staking or investment partner, and inadvertently trips on these laws?

Hi,

these milestones work for us, and give us a really good framework to work within going forward.

Again really good question.

‘Shari’ah compliant staking’ really has at its heart ‘the provision of staking rewards for a token based on an extrinsic set of measurable metrics which constitute value creation’. This method is shari’ah compliant in that 1) a users returns on investment/staking are based on extrinsic factors that are linked to value creation and 2) a user runs the risk of not gaining rewards, if no value has been created.

For people who are not Muslim taking part in our protocol, it wouldn’t matter if they are not aware of the ins and out of shari’ah compliance as the reward would be configured by the smart contract using decentralised oracles (in our case, Chainlink) to provide the metric on which the reward would be based. As such there is no way they would trip on the laws, and would benefit from the staking rewards in line with any other user on the protocol.

Please let me know if you have any other question on this topic :slight_smile:

ps please see an example workflow for the testnet contract (using growth in twitter followers as the extrinsic metric):

@Barakah makes sense. There would be a few more things to sort out such as whether Twitter followers could be gamed (bought) to skew the rewards, but it’s a risk that the project will need to bear.

Approved for $50K Launch. Congratulations!

Looking forward to the first milestone for a Testnet Launch.

“Testnet Launch” means launching a feature-complete product on Harmony Testnet. We define feature complete to include a user interface, connection to a wallet (Metamask, Harmony ONE Chrome Extension, etc.) on Testnet, and can be tested end-to-end by at least 100 users.

Meanwhile, to prepare receiving funds, email your identification documents to kyc@harmony.one and create a MultiSig wallet. You can use this site to do so https://multisig.harmony.one by using instructions below
:arrow_right: Setup Gnosis Safe with MetaMask & 1Wallet

Checkout the Funding FAQ for further info at Harmony Funding FAQ

2 Likes

that’s a great point - we need to test and see what chances there are of gaming this. It might be the case that we apply a rate outside of the smart contract in case we feel there are risks of the twitter follower rate being manipulated, so we have that element of control (in case bots are involved).