HAQQ Whitepaper
Our vision – synthesis of ideology, technology, and community
Islam
Islam is the world’s second-largest religion with almost 2 billion followers — a quarter of the world’s population. Muslims make up a majority of the population in 47 countries. Islam teaches that God is merciful, all-powerful, and unique.
Islamic law, or Shariah law, is a religious law forming part of the Islamic tradition. It guides and dictates many aspects in the lives of Muslims throughout the world, including financial interactions.
One of the core principles of Islamic financial law is the prohibition of paying or charging interest, which is currently not followed by a large part of financial institutions constituting the modern financial system.
According to the Global Islamic Economy Report, the volume of the Islamic financial sector was $2.88 trillion in 2020 and is expected to grow to $3.69 trillion by 2024. According to the same report, two of the four main factors influencing the expansion, as well as the Islamic economy in particular, are the rapidly growing Muslim population, the spread of digital technologies, and mobile communications.
Crypto
Crypto is one of the fastest-growing sectors of the world economy. Bitcoin is the best performing asset in the history of mankind far outperforming anything we knew before.
Today, the crypto industry has a market cap of well over 2 trillion dollars and turnovers are astronomical. However, the global Bitcoin user base is still relatively low, probably as low as 25 million users, compared to billions of active Muslim Internet users.
At the time of writing, humanity seems to be on the very verge of mass adoption of crypto. 2021 saw tectonic shifts in the industry:
- Samsung announced it will be adding a crypto wallet to all of its future phones
- Reddit announced it will launch a crypto product for its 500 million users, etc
- New York Mayor-elect Eric Adams selected to be paid in Bitcoins
- El Salvador selected Bitcoin as its legal tender
- UK Post announced it will start selling Bitcoin
- Tesla began accepting Bitcoin.
These are just some of the highly visible milestones. Global adoption is happening on many levels including business, banking, regulatory, etc.
Blockchain
Blockchain – the technology behind cryptocurrencies is compared by many experts to the Internet itself in terms of its importance and long-term transformative impact on humanity. In general, Blockchain does two things. It allows:
- Parties to securely interact in a trustless way
- Exclude unnecessary intermediaries from any transaction or process.
- Both are achieved due to the ability of blockchain to be a single source of truth for any interacting parties – robust, immutable and uneditable.
Modern blockchains utilize Proof of Stake consensus, allowing for high transaction throughput without overheads such as large energy consumption.
Synthesis
ISLM is designed to deliver a lasting, powerful impact for one of the largest communities in the world. It is the first digital currency to provide economic and social benefits, support innovation and ensure sustainable, long term growth via a dedicated Evergreen DAO.
1. Current credit and banking system.
Fiduciary credit money is a universal unconditional financial obligation that serves the commodity turnover of assets in the economy. The main task of Central Banks, as state regulatory bodies, is to maintain the stability of interest rates and the exchange rate in the money market by regulating the behavior of commercial banks’ lending to non-financial enterprises in order to initiate them to maximize the mass of profits. The process of repayment of the principal amount of debt and interest is consistently carried out according to the hierarchy of the two-level banking system. Firstly, non-financial sector firms and people repay their unconditional loan obligations to commercial banks. Secondly, commercial banks return loans as their unconditional loan obligations to the Central Bank. In case of uninterrupted return of loan money from borrowers to creditors, the effective activity of market entities takes place.
In case of uninterrupted return of loan money from borrowers to creditors, the effective activity of market entities takes place.
Such a system allows governments to pursue a flexible monetary policy, managing the supply of money through the cost of their borrowing (the key rate). At the same time, the current system does not fully comply with the principles and norms of Islamic finance, since both paying and accruing interest for using money is prohibited in Islam.
Although the formation of the Islamic financial system began about 1400 years ago its modern history dates back to the 1970s when Islamic banks were established in Saudi Arabia and the United Arab Emirates. It is important to note that until 1971 all fiat money issued by states as legal tender was backed by gold or silver. Since 1971, states are no longer limited to issuing a new currency according to the gold standard or any other general rule, except for their internal consideration, which supports the possibility of capturing and redistributing wealth. Many fuqaha think that such practices don't correspond to fiqh.
2. ISLM – purposeful community crypto asset.
ISLM is Shariah-compliant digital money, designed to create value for the World’s Muslim community. It is built on Haqq – its dedicated Islamic blockchain. Meaning “Truth”, Haqq stringently abides by Islamic views and traditions on finance
In the Quran, gold and silver are mentioned as examples of pleasures of this worldly life (3:14). That is why Muqaddimah of Ibn Khaldun has written that gold and silver specifically, should be used as money.
The deflationary nature of many cryptocurrency systems, as well as the necessity to invest some work to produce them, is comparable to the properties of gold or silver.
- ISLM cannot be arbitrarily ‘printed’ and thus devalued. It’s also impossible to cause arbitrary deflation through a rise of the Central Bank’s interest rate (key rate) – since there is no interest rate within the system. ISLM’s price is determined solely by the market and thus always fair.
- ISLM may only be minted (issued) by those who contribute work and investment – validators and stakers of the network at a predetermined announced rate.
- Unlike fiduciary money, ISLM is not operated by the banks whose main business is to earn profit by charging interest. Paying or charging interest is forbidden in Islam.
- Each time a new ISLM is minted, 10% of the issued amount is deposited into a special Evergreen DAO for further investment into Islamic internet projects or given to Islamic charities. This is the first introduction of a coin bringing direct economic value to a community.
- The Evergreen DAO is a non-profit virtual foundation focused on long term sustainability and community impact. It effectively works as a crypto endowment. In some cases described below, Evergreen DAO also may fund activities necessary for the Haqq network operations and development.
Our mission is to empower the international community of the followers of Islam with a robust and future-proof financial instrument that allows for independent financial interaction, while supporting innovation and philanthropy.
Leveraging the power of the community, ISLM may become one of the most important and valuable crypto assets. If 3-4% of the Muslim online community will hold ISLM, it will become a bitcoin-scale crypto asset, generating a trillion dollars for its holders, and $100 billion for the Evergreen DAO.
Staking Economy
ISLM Token Details
Islamic Coin (ISLM) is the native currency of Haqq Network. It is used for paying transaction fees, governance and staking.
ISLM is a native currency (virtual asset) of the HAQQ Network, which is a layer one blockchain based on Cosmos SDK. The Haqq network, as well as ISLM, are compatible with other blockchains based on Cosmos SDK (EVMOS, Cronos, Osmosis, etc. https://mapofzones.com) and with EVM (Ethereum).HAQQ Network is based on the Cosmos Software Development Kit. The world's most used framework and standard for building blockchains.
ISLM, a virtual asset, is based on blockchain technology. It utilizes the HAQQ network, a layer-one blockchain based on the Cosmos SDK. To securely store assets, users must create a blockchain wallet. This can be done using the HAQQ wallet mobile application. The blockchain wallets created by this application are non-custodial, meaning that only users have access to them, and all assets stored within them. To transfer ISLM, a virtual asset, users must know the recipient's address. This can be done using the HAQQ wallet mobile application.
HAQQ Network is a blockchain platform based on Cosmos Software Development Kit. Its native cryptocurrency is ISLM, a virtual asset. Cosmos SDK is the most widely used framework and standard for building blockchains. For more information, explore Cosmos SDK. HAQQ Network uses Tendermint Core as its consensus mechanism. Tendermint Core is a consensus engine that ensures the same transactions are recorded in the same order on every machine. For more information about Tendermint Core, please refer to the official documentation at Tendermint Core.
Staking is the process of locking ISLM coins by bonding them to validators. Validators maintain the Haqq Network. By bonding coins, ISLM holders delegate voting power to validators and become delegators, which gives them the right to earn rewards and participate in governance (see Tendermint BFT).
Shortly after listing on exchanges, ISLM inflation will be enabled. Total supply is limited to 100 billion coins. Every block produces new ISLM coins and gas fees collected from users. New ISLM coins and gas fees are distributed between validators, delegators Evergreen DAO:
- 10% goes to Evergreen DAO
- 1% to 5% goes to a block proposer and its delegators
- The remainder is distributed proportionally to all bonded validators and their delegators
Delegators of bonded validators are rewarded in proportion to the amount of their delegation, relative to the total amount delegated to the validator, including validator self-delegation. Rewards are distributed to the delegators minus the validator's own commission.
ISLM supply is limited to 100 billion coins. Inflation is calculated as a percentage of total bonded coins which is a parameter RewardCoefficient controlled by governance and is initially set to 7.78% (i.e. expected to generate ~7% yield for staked ISLM). In each block, newly minted coins (rewards) are calculated as TotalBondedCoins x RewardCoefficient x BlockTimeMs / MsInCurrentYear.
This way, community of ISLM stakers has control over stakers and validators' incentivisation and can flexibly adjust it to market conditions.
Initial supply: 20 billion. It has been minted in a genesis block and was distributed to private sale participants, early stage partners, ambassadors, founders and business reserve. As of August 2023, distribution is as follows (ISLM, billions):
- Private Sale Buyers - 2.93
- Reserved Private Sale - 1
- Founders Reward - 3
- Partners and Advisors - 5.47
- Business Reserve - 5.48 (1 billion is reserved for future Core Team incentives)
- In circulation - 0.12
- Evergreen DAO - 2
Coins dedicated for the Evergreen DAO will be locked until it is fully developed, tested, passed security audit and deployed on Mainnet.
Issue Price and Transferring ISLM
The initial issue price of ISLM is 0.25 per token
The price of ISLM is not pegged by any external asset. Instead, its valuation hinges on its intrinsic necessity and the value it brings to the network. Meanwhile, the pricing of the token is subject to the dynamic forces of market demand as well as the needs of the Haqq network. This pricing structure takes into account factors such as transaction volumes on the network, the proliferation of decentralized applications, the user base, and the number of active wallets.
There are no material legal or regulatory considerations applicable to owning, storing, transferring or otherwise using ISLM in the issuing country. Nonetheless, holders are advised to review the relevant laws and regulations in their individual country of residence.
Architecture
The initial issue price of ISLM is 0.25 per token
HAQQ is an Ethereum compatible Proof of Stake blockchain network with instant finality.
Features:
- Ethereum compatibility allows developers to build applications on HAQQ using the existing Ethereum codebase and toolset, without rewriting smart contracts that already work on Ethereum or other Ethereum-compatible networks.
- IBC compatibility allows HAQQ to interact with other IBC-compatible networks like Cosmos, and in the future with Ethereum.
- High throughput with instant finality makes HAQQ usable for applications beyond the finance realm: social platforms, games, educational projects and much more.
- Proof of Stake mechanism allows HAQQ holders to participate in the network consensus alongside with validators – and earn rewards for securing the network.
- Evergreen DAO, funded by ISLM emissions and a portion of network fees, governed by network participants – dedicated to supporting innovative projects for the international Islamic community.
- Builders Incentive – smart contract authors are incentivized to deploy ecosystem-demanded contracts by network mechanics.
HAQQ is built using Evmos which in turn is based on Cosmos SDK which runs on top of the Tendermint Core consensus engine. That said, high throughput and instant finality are inherited from the Tendermint Core, IBC – from Cosmos SDK and Ethereum Compatibility – from Evmos.
The HAQQ team is committed to implementing Evergreen DAO, and Staking Economy and getting everything together in order to launch a stable network, compatible with the rest of the blockchain ecosystem.
Tendermint, Cosmos and IBC
Tendermint is a software for securely and consistently replicating an application on many machines. Tendermint provides two chief technical components:
- A consensus engine
- A generic application interface.
Tendermint BFT - consensus Engine
The ability to tolerate machines failing in arbitrary ways, including becoming malicious, is known as Byzantine fault tolerance (BFT). Tendermint consensus engine implements Byzantine fault tolerance.
Two important Tendermint consensus engine characteristics are:
- Security – network works even if up to ⅓ of nodes fail or act maliciously.
- Consistency – every non-faulty node sees the same transaction log and computes the same state.
In addition, Tendermint provides instant finality which means that once a transaction is validated, it can be considered final and irreversible. Instant finality means that forks are never created as long as more than a third of validators are honest (byzantine). Users can be sure their transactions are finalized as soon as a block is created.
Security and Consistency of Tendermint BFT Consensus allows the Haqq network to be maintained by a set of independent validators who don’t have to trust each other and will provide consistent data and transaction processing. Instant finality makes Haqq network suitable for a wide range of applications, including the ones that require fast feedback loops like games, social networks, instant payments, etc.
ABCI – generic application interface
Tendermint Core communicates with the application processing transaction via a socket protocol that satisfies the Application BlockChain Interface (ABCI).
ABCI allows the implementation of custom transaction processing logic without forking Tendermint itself. This makes HAQQ and components it’s built on (Evmos) leverage new Tendermint versions without backporting features and fixes by tedious and error-prone code merging process. This also opens ways for the Haqq team to collaborate with Tendermint maintainers and other members of the Tendermint ecosystem, in order to improve Tendermint Core for the good of the whole ecosystem.
Cosmos SDK
Cosmos SDK is the most advanced framework for building custom application-specific blockchains today. Cosmos SDK is the base layer of Evmos which HAQQ is built on.
Cosmos SDK is designed for building blockchains out of composable modules, without forking the core. Cosmos SDK uses Tendermint as a default consensus engine.
Cosmos SDK is a stable, time-proven solution that powers hundreds of blockchain applications including Binance Chain, Terra and Cosmos Hub.
The most important benefit for HAQQ being built on the Cosmos SDK is compatibility with the Inter-Blockchain Communication Protocol which makes HAQQ interoperable with the rest of the Cosmos ecosystem.
Inter-Blockchain Communication Protocol
Blockchain is an open ecosystem and we believe that it should stay the same. We also believe that interoperability with different blockchains is an essential part of openness. That belief defines one of the most important reasons to choose Cosmos SDK as the foundation of HAQQ Blockchain.
IBC is a protocol that defines the way for IBC clients (mainly, blockchain networks but not limited to them) to read the consensus states of other blockchains and the proof specs of those blockchains, that are required to properly verify proofs against the client's consensus state.
In practice, HAQQ being compatible with IBC means that it can communicate with other IBC-compatible networks which already hold more than $148 billion worth of assets under management.
IBC is not a cross-chain token transfer protocol – it’s a general communication protocol as the name implies. IBC makes it possible for blockchains to communicate with each other. This includes the transfer of tokens, but it is not limited to that. This is different from isolated networks like Ethereum, within which connection to other networks is limited by token transfers only.
When enabled, IBC compatibility will interconnect HAQQ with the rest of the Cosmos ecosystem. This includes Osmosis – interchain AMM – which, besides Cosmos networks, has plans to integrate with Ethereum and other EVM-compatible networks. The HAQQ team also considers implementation of a direct bridge to Ethereum with a simplified user experience.
Ethereum compatibility and Evmos
HAQQ desires to be open not just to users but to developers interested to build projects on the HAQQ network. This requires HAQQ to support a programming language and toolset familiar to the majority of blockchain developers. According to the Electric Capital Developer Report, Ethereum still has the largest developer community. That makes it logical for Haqq to strive to support Ethereum Virtual Machine for smart contracts execution and Solidity as the primary smart contracts language.
For the purpose of EVM compatibility HAQQ is using some components of Evmos – the network based on Cosmos SDK which provides full EVM compatibility, or equivalence.
HAQQ being EVM-equivalent, means that everything that is built on Ethereum or other EVM-equivalent networks like Optimism or the Evmos and Evmos-based networks – can be deployed on HAQQ without rewriting a single line of smart contract code and worrying about things to break in unexpected ways.
Evmos is the continuation of Ethermint project – the EVM-compatible blockchain with Tendermint BFT consensus. Evmos is being developed by Tharsis whose team has been the core development team behind the Ethermint codebase since April 2021.
Shariah Oracle – an on-chain registry of Halal Certificates
To ensure observance of Shariah compliance, we created the Shariah Oracle. This ethical protection mechanism, along with community oversight and Shariah Board approval, ensures that only Shariah-compliant smart contracts are whitelisted on the HAQQ Wallet. The Shariah board is one of the HAQQ Network and ISLM boards.
Shariah Oracle is an on-chain mechanism controlling a whitelist of smart contracts allowed for interaction (signing and listing in the in-app marketplace) through the HAQQ Wallet.
The Shariah Oracle serves as an on-chain registry of Halal Certificates that provides smart contract developers and web2 businesses a way to prove their ethical relevance for Muslim users by listing their products/services on the Haqq Wallet.
Integrating the Shariah Oracle with Haqq Wallet will ensure that users interact only with whitelisted, Sharia-compliant dApps. Thus whilst being a place where anyone can deploy their dApp or project, Haqq network’s Shariah Oracle is a key measure to minimize unethical or Haram activity in our network.
Purpose
- Why Shariah Oracle?
- What is the value proposition?
- Why Shariah Oracle?
- What is the value proposition?
The HAQQ Network's Shariah Oracle is an excellent example of how blockchain oracles can be utilized to create a more ethical and sustainable financial system.
The Shariah Oracle ensures that all smart contracts that interact with the HAQQ Wallet are Shariah-compliant, which means they adhere to Islamic principles and ethics. This feature is essential for Muslims and ESG-driven investors who prioritize ethical investing practices.
The Shariah Oracle's mechanism of community and Shariah Board approval ensures that only Shariah-compliant smart contracts are whitelisted on the HAQQ Wallet. This feature benefits HAQQ ecosystem investors and users by providing a transparent, secure, and Shariah-compliant environment for investment. It also helps to mitigate common front-end attacks, making it harder for hackers to hijack smart contracts and manipulate data. For instance, if a user tries to interact with a non-whitelisted contract on the Shariah Oracle level, the user gets a warning message.
Additionally, other smart contracts can integrate with the Shariah Oracle as well. Since both community and Shariah approvals are Soulbound tokens (SBTs), smart contracts like Decentralized Exchanges (DEXes) can quickly check whether the ERC-20 token sent to them as liquidity is Shariah/community approved or not – and decide whether to accept it or not. This seamless integration allows for increased compliance and security within the HAQQ ecosystem, ensuring that all participants adhere to Shariah principles and maintain a reliable environment for investment.
How It Works
The Shariah Oracle will be implemented on top of the Layer 1 governance and has two levels of approval: Community approval and Shariah board approval.
Community level approval
Community approval is granted by the ISLM stakers. It grants the right for the project to be listed in HAQQ Wallet Marketplace, and users can interact with such a contract without warning IF they selected community approval as the preferred level of approval. In order for a smart contract to be whitelisted, the author or project community should submit a governance proposal to whitelist a smart contract. Then ISLM stakers vote for or against this proposal. If the community accepts a proposal, the smart contract gets whitelisted on HAQQ Wallet but doesn’t get the Shariah-compliance mark. Additionally, the community approval ensures that users of the HAQQ Wallet also get a warning notification if they attempt to sign any transaction on non-community-approved contracts.
This warning feature ensures that users only interact with verified smart contracts, reducing the potential for fraudulent activities and enhancing the security of the HAQQ Network. An example of the importance of this warning feature is the recent frontend attack on the stablecoin AMM exchange, Curve, where hackers were able to hijack a portion of the frontend code to redirect user funds to their wallet. A warning system like the HAQQ Wallet would easily forestall this kind of attack as users would have been alerted when interacting with the hijacked code, preventing the inadvertent transfer of funds to malicious contracts.
Another key feature of the community-approved projects is that once approved, they are highlighted and showcased by getting listed on the in-app marketplace within the HAQQ Wallet. This allows developers to showcase their projects to a broader audience, thereby increasing their chances of adoption and success.
Shariah Board approval
Shariah Approval is given by Shariah Board. It grants projects Shariah Compliant label in the marketplace, and users can interact with such contracts without warning regardless of the preferred level of approval. For an explicit shariah-compliance mark, a community-approved project will have to submit a proposal alongside a deposit for review by the Shariah Board. The deposit is a board services fee that goes directly to scholars. If accepted, it gains an explicit shariah-compliance checkmark.
The Shariah Board reserves the right to revoke its endorsement for approved contracts should the projects exhibit non-compliant behavior at any point. In such cases, users can still interact with the smart contract. Still, the Haqq Wallet will display a conspicuous warning when attempting to sign a transaction involving a non-Shariah-compliant smart contract. This precaution is necessary as users may still have funds locked within the smart contract.
Initially, audits are conducted exclusively by our Shariah board. However, to avoid creating a bottleneck and to promote decentralization, we plan to implement authorized Shariah auditors in the future. By empowering our board to authorize other auditors to conduct compliance audits, we aim to streamline the process and ensure a more decentralized approach.
How does the Shariah Oracle maintain decentralization?
It is important to clarify that the Shariah Compliance feature does not impose centralization on the Haqq network. Instead, the Shariah Oracle influences only the Haqq Wallet behavior and not any other aspect of the Haqq network or Layer 1. As a result, users not concerned about Shariah compliance can still interact with any smart contract deployed on the Haqq Network via Metamask or any other EVM-compatible wallet.
Additionally, even with the Haqq wallet, users can interact with any smart contract by confirming transactions through a warning pop-up, ensuring that they are aware of any potential non-compliant transactions.
NOTE:
If a user interacts with smart contracts without community or Shariah approval, then:
- If his preferred level of approval is the Community, he gets a warning that the project has got neither community approval nor Shariah approval ** yet **
- If his preferred level of approval is Shariah, he gets a warning that the project has not got Shariah approval ** yet **
Technical Architecture
Description of the technical architecture of the Shariah Oracle
Community Approval Process:
- Proposal submission: An $ISLM staker submits a proposal for community approval via gov module
- Deposit: Proposals must be submitted with a minimum deposit to prevent spam.
- Vote: Community participants vote on the proposal.
- Whitelist (SBT issuance): Once approval is done, SBT is issued over a smart contract.
Shariah Approval Process:
- Proposal submission: An SBT token holder can submit a proposal for Shariah approval for ONLY a community-approved smart contract.
- Deposit: Proposals must be submitted, which serve as audit fees for the board or authorized auditors. Hence it is non-refundable.
- Shariah Board approval: After the community approves a smart contract, the Shariah Board conducts an audit and provides feedback. The project team implements the feedback, and the board conducts a final review, either approving or rejecting the smart contract for Shariah compliance. No community vote is required for this process.
Revoking Shariah approval
If a project marked as Shariah-compliant deviates from the prescribed guidelines, it is flagged and provided a grace period of three to six months to rectify the issues.
During this time, any HAQQ community member who chooses to engage with the associated contract will receive a warning notification that the project is not approved. If the grace period expires without the necessary corrections made by the project, the HAQQ Network will impose restrictions, preventing HAQQ wallet users from accessing such contracts only.
if the user has set Shariah approval as his preference. However, these contracts can still be interacted with via Metamask or any other EVM- compatible wallet.
Shariah Compliance Criteria
By establishing a set of Shariah compliance criteria, the Shariah Oracle is able to screen and filter smart contracts that seek to list on the HAQQ wallet. These criteria will be based on the Islamic principles of fairness, transparency, social responsibility and other measures as stipulated by our scholars. For example, the Shariah Oracle checks if a smart contract involves prohibited activities like gambling, usury, or other unethical practices.
Halal Certification
The Shariah Oracle provides a Halal certification (verification mark) for smart contracts that meet the Shariah compliance criteria. This certification will be displayed on the apps for wallet users to see, allowing them to easily identify and interact with the Halal-certified smart contracts.
** Shariah Oracle is expected to go live in Q4 2024.*
Evergreen DAO
Purpose
Evergreen DAO is introduced to fund projects benefiting the global Muslim community, grants to ecosystem maintainers, bug bounties, marketing activities and other initiatives which the community decides are helpful for the HAQQ Network and/or the Muslim community.
Governance
The HAQQ Community and HAQQ Shariah Board govern Evergreen DAO
Evergreen DAO governance is similar to a default Cosmos Governance with three differences:
- The HAQQ Shariah Board can approves every spending proposal
- Users are financially incentivized to submit high-quality proposals which benefit the Muslim Community
- Deposits never burn – they get transferred to the Evergreen DAO in the event of Voting Period or Deposit Period failure.
Evergreen DAO will be based on the Cosmos Community Pool
Spending initiatives can be submitted by any ISLM staker and go through a governance process which consists of the following periods:
- Deposit Period
- Voting Period
- Shariah Approval Period
Submitting a spending proposal
Any ISLM staker can submit a spending proposal. This proposal should be first submitted to an off-chain discussion board. Then a link to this initiative should be submitted to the governance module alongside metadata which consists of the spending amount and target.
Deposit period
Like in default Cosmos governance, proposals must be submitted with a deposit in the coins defined in the MinDeposit param. The voting period will not start until the proposal's deposit equals ’MinDeposit’.
When a proposal is submitted, it has to be accompanied by a deposit that must be strictly positive but can be inferior to ’MinDeposit’ . The submitter doesn't need to pay for the entire deposit on their own. If a proposal's deposit is inferior to ’MinDeposit’ , other token holders can increase the proposal's deposit by sending a ’Deposit’ transaction. The deposit is kept in an escrow in the governance ’ModuleAccount’ until the proposal is finalized (passed or rejected).
Once the proposal's deposit reaches ’MinDeposit’ , it enters a voting period. If a proposal's deposit does not reach ’MinDeposit’ before ’MaxDepositPeriod’ , the proposal closes, and nobody can deposit on it anymore.
Voting period
Voting period follows the default Cosmos governance process. Proposal enters the Voting Period once it reaches ‘MinDeposit’.
Participants (bonded ISLM holders) vote ‘Yes’ , ‘No’ , ‘NoWithVeto’ or ‘Abstain’.
‘NoWithVeto’ counts as ‘No’ but also adds a Veto vote. Abstain option allows voters to signal that they do not intend to vote in favor or against the proposal but accept the result of the vote.
Quorum
Quorum is the minimum percentage of voting power that needs to be cast on a proposal for the result to be valid.
Threshold
Threshold is defined as the minimum proportion of ’Yes’ votes (excluding ’Abstain’ votes) for the proposal to be accepted. Initially, the threshold is set at 50% with a possibility to veto if more than 1/3rd of votes (excluding ’Abstain’ votes) are ’NoWithVeto’ votes. This means that proposals are accepted if the proportion of ’Yes’ votes (excluding ’Abstain’ votes) at the end of the voting period is superior to 50% and if the proportion of ’NoWithVeto’ votes is inferior to 1/3 (excluding ’Abstain’ votes).
Inheritance
If a delegator does not vote, it will inherit its validator vote.
Shariah Approval Period
If and when the proposal has passed the Voting Period, the proposal enters the Shariah Approval Period. During this period HAQQ Association Shariah Board reviews a proposal and decides if it complies with Shariah Law. If the Shariah Board approves a proposal, it gets executed and coins are transferred to the destination defined in a proposal.
If the Shariah Board rejects the proposal, coins stay in Evergreen DAO. If the Shariah Board doesn’t submit a decision in 21 days, a proposal gets automatically rejected, coins stay in Evergreen DAO.
Deposit refund and seizure
When a the a proposal finalized, the coins from the deposit are either refunded or go to Evergreen DAO (on the contrary to the default cosmos governance where coins are burned), according to the final tally of the proposal:
- If the proposal is approved or if it's rejected but not vetoed during Voting Period, deposit will automatically be refunded to their respective depositor (transferred from the governance ModuleAccount) regardless of the Shariah Approval Period outcome.
- If the proposal is vetoed by a supermajority during the Voting Period, deposit is transferred to the Evergreen DAO (Community Pool Module)
- If the proposal closes during the Deposit Period (didn’t reach MinDeposit during MaxDepositPeriod), deposit is transferred to the Evergreen DAO (Community Pool Module).
Organizational Structure and Roles
HAQQ and ISLM operate through two distinct entities, each contributing essential functions to the project's success:
ICNETWORK Ltd (Issuing Entity)
Registered under the laws of the BVI, ICNETWORK Ltd serves as the issuing entity of ISLM tokens. It holds the role of the initial deployer for the HAQQ Blockchain, the base blockchain infrastructure for ISLM. ICNETWORK Ltd minted the first 20 billion ISLM tokens and acted as the driving force behind ISLM token private sale.
Haqq Association (Operational Entity)
Operating as a non-profit entity registered under Swiss law, Haqq Association assumes the pivotal role of the operational backbone. While primarily dedicated to the promotion of HAQQ, the association simultaneously undertakes responsibilities in business development and legal representation on behalf of the project.
Bored Gen DMCC (Developer Entity)
Acts as the main developer responsible for the heart of Haqq Network's software infrastructure. This includes the development of critical components like the Haqq Wallet and Launchpad. Moreso, Bored Gen's role extends far beyond code. With cutting-edge software solutions, they ensure seamless interactions within the HAQQ ecosystem, enhancing user experience and functionality.
Future Development and Distribution
Currently, ISLM is listed on KuCoin centralized exchange. Core team is commiting to list ISLM token on top tier exchanges within foreseeable future. Due to complexity of such process
Commitment to Sustainability Goals and Ethical Governance
At HAQQ Network, our alignment with UN-mandated Sustainable Development Goals (SDGs) is not just a checklist; it's a fabric woven into every facet of our operations.
Starting with environmental sustainability, we've opted for a Proof-of-Stake (PoS) consensus mechanism. This not only lowers our carbon footprint but also ensures network security without sacrificing environmental responsibility.
Moving on to regulatory compliance, we strictly adhere to the legal frameworks of the jurisdictions we operate in. This cultivates an atmosphere of trust and accountability that we consider indispensable for user engagement and retention.
On the ethical front, our initiative is guided by a profound sense of responsibility. Our focus is on financial inclusion, ethical investments, and philanthropic endeavors, blending purpose with profitability.
As for governance, transparency is our guiding principle. Well-defined structures and open decision-making processes form the backbone of our ESG compliance, encouraging a culture of responsible innovation.
Finally, turning to community involvement, we are genuinely collaborative. We value our users' input as essential to our development journey. Moreover, our 2022 partnership with the World Green Growth Organization underlines our commitment to championing SDG-compliant projects and ventures.
Ideas for the future
Haqqers DAO
Haqqers DAO might be implemented in future in order to govern various aspects such as:
- Some on-chain decisions, such as technical assessments of smart-contracts during Shariah Oracle’s community approval phase.
- Funding ecosystem infrastructure initiatives including but not limited to RPC, validator tools, contributions to node, documentation and core ecosystem products.
- DAO itself can be funded by coins deducted from staking inflation, in which case exact percentage of deducted coins would be controlled by general on-chain governance.
Builders Incentive
Rather than going directly to validators, like in the case of Ethereum, the fees generated by Smart Contracts can be shared between validators and authors of smart contracts in the proportion of 50%/50%.
We expect this mechanic to incentivize builders to create projects without nonpurposeful mechanics at the core of their business models. Furthermore, by building this mechanic we encourage collaboration between Smart Contracts developers, in order to create additional value by composing their Smart Contracts.
DISCLOSURES
ISLM Disclosure Statement
1. Introduction:
This disclosure applies to Islamic Coin (ISLM), a digital asset operating on the HAQQ Network. It is intended to inform users, investors, and participants about the key aspects and risks associated with dealing in ISLM.
2. Nature of ISLM:
ISLM is a cryptocurrency developed with specific principles and goals in mind, aligning with Islamic financial ethics. However, it is crucial to understand that ISLM, like any cryptocurrency, carries inherent risks.
3. Regulatory Status:
Any Licence or approval granted by VARA under this VA Issuance Rulebook is not an endorsement of either [i] the Issuer or [ii] the Virtual Asset and must not be construed or considered as such.
Unless otherwise specified in its communications, VARA makes no representation and does not provide any warranties regarding any Issuer or Virtual Asset including, but not limited to, their fitness for purpose, suitability or regulatory status in any jurisdiction other than the Emirate of Dubai, UAE.
Any representation contrary to the above shall be deemed to be a breach of the Virtual Assets and Related Activities Regulations 2023.
4. Investment Risks:
Investing in cryptocurrencies, including ISLM, involves significant risk. The value of ISLM can be extremely volatile, and investors may lose the entirety of their investment. It is recommended that only individuals who understand and are willing to assume the financial, legal, and other risks involved in such investments should participate.
5. No Guarantee of Returns:
There is no guarantee of profits or returns from the purchase or holding of ISLM. The performance of ISLM depends on various factors including market trends, technological developments, and regulatory changes.
6. Technological and Security Risks:
Blockchain and cryptocurrency technologies are subject to risks including but not limited to hacking, software vulnerabilities, and operational disruptions. While ISLM endeavors to maintain robust security protocols, users assume the risk of loss due to technological failures.
7. Compliance with Islamic Finance Principles:
While ISLM is developed with the intention of adhering to Islamic financial principles, users are encouraged to conduct their own due diligence and consult with knowledgeable Islamic finance experts to determine its compliance with individual standards and beliefs.
8. Taxation and Legal Considerations:
The taxation and legal status of cryptocurrency transactions, including those involving ISLM, may vary by jurisdiction. Users are responsible for understanding and complying with all applicable tax and legal obligations in their respective jurisdictions.
9. No Third-Party Representations:
No third party, including exchanges or wallet providers, is authorized to make any representations or commitments on behalf of ISLM, unless explicitly stated by ISLM's official channels.
10. Acknowledgment:
By acquiring, holding, or using ISLM, users acknowledge and agree that they have read, understood, and accepted the risks and terms outlined in this disclosure.
