ParaSwap
Crypto Overview
Purpose and Intended Utility
ParaSwap is a decentralized exchange (DEX) aggregator protocol that aims to provide users with the best token swap rates by splitting orders across multiple DEXs and liquidity sources. The PSP token serves as a governance token allowing holders to participate in protocol decisions and receive rewards for staking.
Business Model Assessment
The core business model revolves around optimizing token swaps and providing liquidity aggregation services. The protocol generates revenue through trading fees, which are distributed to PSP stakers. The basic model appears compliant with Shariah principles as it facilitates legitimate asset exchange and provides real utility through price optimization.
Actual Utility and Adoption
ParaSwap has demonstrated significant adoption with over $12 billion in accumulated trading volume. The protocol integrates with major DeFi platforms and has active usage on multiple blockchains including Ethereum, Polygon, and BNB Chain. Developer activity remains consistent with regular updates and improvements to the protocol.
Token Distribution and Founder Analysis
The PSP token distribution includes: 15% to the team (vested over 2 years), 17.5% to investors (vested over 18 months), 50% to the community and ecosystem, and 17.5% to the treasury. The vesting schedules and relatively balanced distribution suggest reasonable measures against founder enrichment schemes.
Technical Implementation
The protocol employs smart contracts to execute trades and manage governance. While it includes staking mechanisms, these function as protocol participation rewards rather than interest-bearing loans. The technical architecture focuses on price discovery and efficient token swaps rather than lending or borrowing.
Crypto Impact
To assign a comfort level investing in ParaSwap 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 ParaSwap.
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.