LIQ Protocol
Crypto Overview
Purpose and Utility
LIQ Protocol aims to create a more efficient liquidation system for decentralized finance (DeFi) protocols. The LIQ token provides governance rights and incentivizes participation in the protocol's liquidation mechanism.
Business Model Analysis
The protocol facilitates automatic liquidations of under-collateralized positions in DeFi lending markets. While the underlying DeFi lending aspect would typically be considered non-compliant with Sharia principles due to interest-based lending, the liquidation mechanism itself is essentially an auction system for collateral, which can be viewed as a form of asset exchange.
Real-World Adoption and Development
The protocol has shown limited adoption, primarily being used within specific DeFi ecosystems. Development activity appears to be ongoing, though at a moderate pace.
Token Distribution and Governance
The token distribution includes allocations for the development team, early investors, and the community. Specific vesting schedules are in place to prevent immediate token dumps.
Core Technology Assessment
The primary function of LIQ Protocol is to facilitate the auction and liquidation of collateral. This process involves the actual exchange of digital assets, with both parties receiving tangible value in the transaction.
Crypto Impact
To assign a comfort level investing in LIQ Protocol 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 LIQ Protocol.
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.
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