What is the $60 million 'Islamic Coin'?

Zhuorui Fu

2023-06-29 17:32

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Politically and economically, the Middle East is a game field for great powers. In cryptocurrencies, a taste of the Middle East has also given birth to distinctive projects.

Islam is the world's second largest religion, with nearly 2 billion followers, a quarter of the world's population. Muslims make up the majority of the population in 47 countries. And the user ARPU in the Middle East is very high, for people doing business, this is a huge market.

Shariah is an important religious law that forms part of the Islamic tradition and guides and governs many aspects of Muslim life worldwide, including financial activities. One of the core tenets of Islamic financial law is the prohibition on the payment or collection of interest, which makes it almost impossible for modern non-Islamic financial systems to comply with Islamic law. After all, interest is one of the core businesses of non-Islamic financial institutions. The average Islamic compliant bank does not feedback "interest" to customers, but instead shares "profit" to customers through "profit sharing".

According to the Global Islamic Economy Report, the size of the Islamic finance sector was $2.88 trillion in 2020 and is expected to grow to $3.69 trillion by 2024. Two of the four main factors affecting expansion are the rapid growth of the Muslim population, the spread of digital technology and the development of mobile communications.

The Islamic financial system, with its ban on speculative trading and uncertainty, and its focus on equity and risk-sharing, has been virtually unaffected by the recent financial crisis. Islamic finance is a rare example of finance.

It was against this background that the Islamic Coin project was born in the UAE. According to my non-public information (information may be incorrect), the project has raised more than 200 million dirhams (about 400 million yuan), mainly from Russian investors, and is currently under contract with Coinbase.

Islamic Coin (ISLM) was founded by ICNetwork Ltd, a private technology firm based in the United Arab Emirates. The website describes the team as experts in blockchain and ethical finance. A notable early contributor and founder of IC Tech is Andrey Kuznetsov, an engineer from Belarus. ICNetwork Ltd is the developer of the Haqq blockchain.

The Haqq (Truth in Arabic) blockchain is a PoS network that is primarily compatible with Ethereum and Cosmos, currently supporting Evmos for Cosmos using the Cosmos SDK and later Ethereum. Meet the requirements of modern industry, with fast finality and high transaction throughput. Haqq is the first decentralized Sharia-compliant ledger.

Islamic Coin is Haqq's ecocoin with a limited total supply and 10% of each issue is automatically deposited into the Evergreen DAO. Evergreen DAO is a non-profit virtual foundation used to further invest in projects that benefit the Muslim community or donate to Islamic charities. In some cases, Evergreen DAO may also fund activities necessary for the operation and development of the Haqq network. Key decisions are made by a committee made up of the top five verifiers of the Haqq blockchain.

Islamic coins cannot be arbitrarily "printed" and thus devalued, nor can they cause arbitrary deflation by raising the central bank's interest rate since there is no interest rate in the system. The price of Islamic Coin is determined by the market.

The Cosmos based Islamic Coin is minted using Tendermint BFT. With minting enabled, each block will generate new ISLM coins and gas charged to the user until 100 billion coins are minted. The new ISLM token and Gas fee are divided between the verifier, the principal, and the Evergreen DAO:

10% to Evergreen DAO.

Between 1% and 5% are allocated to block proposers and their principals.

The remainder is allocated proportionally to all bound verifiers and their principals.

The supply of ISLM is limited to 100 billion tokens. For each period of two years, ISLM's emission rate fell by 5%. From the first block of the first era, emissions will stop after 100 years.

In the first section, the project will mint 4.33 percent of the coins, followed by 4.12 percent, and the ninth era will mint 2.87 percent. More than 50% of the total supply will be minted, including the initial supply, at the end of the 9th era, when the main net comes online. 100% (100 billion ISLM) will be minted at the end of the 50th era, after which no ISLM will be minted.

An initial supply of 20 billion will be distributed as follows:

2 billion -- the Evergreen Foundation -- according to Century Coinomics.

5.5 billion -- Partners: Board of directors, initial backers, sponsors and market makers.

$4 billion -- first private placement. The tokens will be sold to qualified private investors.

5.5 billion -- operational reserve and ecosystem development Fund. The tokens will be used for public offerings, operating costs, business development, grants, and other ecosystem-centric activities.

3 billion -- founder award.

The token dedicated to the Evergreen DAO will be locked up until it is fully developed, tested, and deployed on the mainnet.

At present, the consulting and operation team of the company/project are mainly senior Islamic law bankers, experts and members of the ABU Dhabi royal family.