The Mathematical Basis of Proportional Calculation
In Islamic decentralized contracts, profits are calculated proportionally based on the duration of asset ownership and ownership ratio. If you buy an asset worth 10,000 USDC and sell it after 100 days with a profit of 500 USDC, your daily profit is 5 USDC. Profits are distributed daily at a fixed percentage, ensuring complete fairness without any discrimination.
Application of the 'Surplus Refunded' Principle
The contract ensures that any surplus in payments is calculated proportionally and refunded to the buyer. For example, if you pay 2,000 USDC as a down payment and then settle the remainder early, profit is calculated only for the actual period, and the difference is refunded. This prevents any exploitation or riba.
Transparency via Smart Contracts
The calculation formula is written in the smart contract and open for audit on BaseScan. Every transaction is timestamped, allowing any party to verify the proportional calculation. There are no hidden numbers or manual calculations.
Comparison with Conventional Finance
In conventional riba-based finance, interest is calculated over the full term regardless of early repayment, which harms the buyer. In Qist, proportional calculation rewards early repayment by reducing profit, aligning with Sharia principles that prohibit gharar and injustice.
How Qist Implements This
In a Qist contract, when purchasing an asset, the contract duration and a fixed profit are set. Each monthly payment proportionally reduces the remaining profit. If you pay the full amount before the term, profit is recalculated for the actual days and the surplus is refunded. The USDC system ensures precise calculation without volatility.
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Informational content, not financial advice