iBTC
Crypto Overview
Overview
iBTC (interest-bearing BTC) is a token launched on the Ethereum blockchain that represents Bitcoin being used as collateral in DeFi lending protocols to generate interest returns.
Purpose and Utility
The primary purpose of iBTC is to allow Bitcoin holders to earn interest on their BTC holdings through DeFi lending protocols. Users deposit BTC which gets wrapped and used as collateral for lending, generating interest returns that are distributed to token holders.
Business Model Analysis
The core business model revolves around lending cryptocurrency for profit, which is effectively riba (interest). The protocol generates returns by lending out user deposits and charging interest to borrowers.
Development and Adoption
The protocol appears to have active development and integration with major DeFi lending platforms. However, the fundamental mechanism of profiting from interest-based lending remains problematic from an Islamic finance perspective.
Token Distribution and Governance
While the token distribution and technical implementation appear transparent, the underlying business model of interest-based lending makes the token's primary utility incompatible with Islamic finance principles.
Crypto Impact
To assign a comfort level investing in iBTC from a halal perspective we need to determine whether it has a net positive or negative impact.
Towards this end, the table below is used to tally all the positive and negative considerations our members can think of related to iBTC.
If you don’t see something that should be listed, positive or negative, feel free to submit your own contribution using the button “Contribute”.
We will review your contribution for accuracy before publication.
Importantly, you can review listed contributions and vote on which one you think has the greatest impact, positive or negative.
You only have one vote per asset so use it wisely.
You can change your vote if you change your mind.