1. Roots of the Idea: Islamic Finance on Base Blockchain
The idea emerged from the need for a Sharia-compliant financing model in the decentralized finance (DeFi) world. With ~1.9 billion Muslims and traditional Islamic finance reaching ~$4 trillion, there was a pressing need for individual financing that avoids riba (usury) and gharar (uncertainty). Base was chosen for its low fees and speed, ensuring transparency through open contracts on BaseScan.
2. Initial Design: Sharia Principles at Every Step
Principles were established: the seller owns the asset, payment in USDC stablecoin, profits based on sale (not interest), and any surplus returned to the buyer. A 3-day grace period for the buyer, with no hidden fees (clear 2% fee). This ensures compliance with deferred sale and lease-to-own without suspicion of riba.
3. Smart Contract Implementation: From Theory to Code
The smart contract was developed on Base using Solidity, with rigorous testing for compliance. The contract was fully audited and published on BaseScan, allowing anyone to verify its mechanisms: registering seller and buyer, transferring ownership, scheduling payments, and returning surplus. It uses USDC oracles without relying on interest-based loans (following direct financing principle).
4. Challenges and Improvements: Avoiding Gharar and Risks
The team faced challenges in ensuring contract clarity (no gharar) and handling late payments with a grace mechanism. Features were added: guaranteed cancellation if the first payment fails, and clear financing duration. The contract is immutable (enhancing trust) with the ability to monitor transactions directly on BaseScan. This meets contemporary fatwa requirements.
5. How Qist Implements This
Qist provides a 'Qist' model based on this journey: users purchase goods or services in installments via USDC, with the seller retaining ownership until full payment. Surplus is returned, fee is only 2%, and a 3-day grace period. This is done through an open smart contract on BaseScan, making it halal and transparent for every Muslim seeking non-usurious financing.
Discover Qist: qist.info
This content is for informational purposes only and not financial advice.