Recently completed a $200 million financing, what are the features of the Islamic cryptocurrency project Islamic Coin?

特邀专栏作者

2023-06-29 20:00 (UTC+8)

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In political and economic terms, the Middle East is a major arena for power play. In the world of cryptocurrency, the Middle East's unique characteristics have also given birth to distinctive projects.

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BlockBeats Note: This article was written in January 2023, when the project had already raised over 200 million dirhams (approximately 400 million yuan) and the major investors were primarily of Russian background and planning to list on Coinbase.

In terms of politics and economics, the Middle East is a battleground for major powers. In the world of cryptocurrency, the Middle East's charm has also given birth to unique projects.

Islam is the second largest religion in the world, with nearly 2 billion followers, accounting for one-fourth of the world's population. Muslims make up the majority in 47 countries. Moreover, the average revenue per user (ARPU) in the Middle East region is high, making it a vast market for business endeavors.

Shariah, Islamic law, is an important part of Islamic tradition and guides many aspects of Muslim life worldwide, including financial activities. One of the core principles of Islamic finance is the prohibition of paying or charging interest, which makes it almost impossible for the non-Islamic modern financial system to comply with Islamic regulations, considering that interest is a core business for non-Islamic financial institutions. Islamic-compliant banks generally do not provide "interest" to customers but share "profits" 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 major factors influencing this expansion are the rapid growth of the Muslim population and the spread of digital technology and mobile communications.

"Halal Compliant Chain"

Due to its prohibition on speculative trading and uncertainty, as well as its focus on fairness and risk sharing, the Islamic financial system has hardly been affected by recent financial crises. Islamic finance is a rare example in the financial world.

Against this backdrop, the United Arab Emirates has given birth to the Islamic Coin project. According to my understanding based on non-public information (which may be inaccurate), the project has raised over 200 million dirhams (approximately 400 million yuan), with major investors primarily of Russian background, and is currently preparing to list on Coinbase.

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

Haqq (truth in Arabic) is a PoS network that is mainly compatible with Ethereum and Cosmos. It currently supports Cosmos through Evmos, which uses Cosmos SDK, and will support Ethereum in the future. It meets the requirements of the modern industry, with fast finality and high transaction throughput. Haqq is the first decentralized ledger that complies with Islamic law.

Tokenomics

Islamic Coin is the native token of Haqq. Its total supply is limited, and 10% of each issuance is automatically stored in Evergreen DAO. Evergreen DAO is a non-profit virtual foundation that invests further in projects benefiting the Muslim community or donates to Islamic charities. In certain cases, Evergreen DAO may also fund activities required for the operation and development of the Haqq network. Key decisions are made by a committee composed of the top 5 validators on the Haqq blockchain.

Islamic Coin cannot be arbitrarily "printed" and thus devalued. Due to the absence of interest rates in the system, arbitrary deflation cannot be caused by raising central bank interest rates. The price of Islamic Coin is determined by the market.

The Islamic Coin based on Cosmos is minted using Tendermint BFT. After minting is enabled, new ISLM coins are generated in each block and gas is collected from users until 100 billion coins are minted. The new ISLM tokens and gas fees are allocated among validators, delegators, and Evergreen DAO:

- 10% goes to Evergreen DAO.

- 1% to 5% is allocated to the block proposer and their delegators.

- The remaining portion is proportionally distributed among all bonded validators and their delegators.

The supply of ISLM tokens is capped at 100 billion. Each epoch, which is 2 years, reduces the emission rate of ISLM by 5%. Emission will cease 100 years after the start of the first epoch. In the first epoch, the project will mint 4.33% of the coins, followed by 4.12%, and the 9th epoch will mint 2.87%. More than 50% of the total supply will start being minted at the end of the 9th epoch when the mainnet is launched, including the initial supply. 100% (100 billion ISLM) will be minted by the end of the 50th epoch, after which no more ISLM will be minted.

The initial supply is a total of 20 billion, distributed as follows:

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

- 5.5 billion - Partners: Board, initial supporters, founders, and market makers.

- 4 billion - Initial private sale. These tokens will be sold to eligible private investors.

-55 billion - Business Reserves and Ecosystem Development Fund. These tokens will be used for public issuance, operating costs, business development, grants, and other ecosystem-centered activities.

-30 billion - Founder's Rewards.

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

The advisors and operations team of the company/project are mainly composed of senior Islamic banking professionals, experts, and members of the Abu Dhabi royal family.