Assalamu’alaikum brother,

Thank you for your question and for your continuous support of Sharlife’s work.

Regarding AAVE and its inclusion in the lending and borrowing category:

Based on discussions in our Shariah Committee meetings, our current view is that crypto lending can be permissible under certain conditions. Specifically, only tokens that are Shariah-compliant and not backed by ribawi items may be considered for lending arrangements.

However, this permissibility does not apply to tokens that are Shariah non-compliant or ribawi in nature, such as stablecoins backed by fiat currencies or interest-bearing assets.

As for AAVE, we recognize that it functions as a neutral protocol — it facilitates lending and borrowing services, but does not itself enforce which tokens are used. On platforms like Binance or AAVE’s own interface, you’ll find both compliant and non-compliant tokens being supported. Therefore, the responsibility ultimately lies on users to ensure they only interact with tokens that are Shariah-compliant and not backed by ribawi items.

That said, one area that remains under discussion is whether lending a Shariah-compliant token that functions purely as a medium of exchange — and charging for it — may constitute riba al-duyun (interest on debts). This is a topic that requires deeper examination, and we are actively researching on it.

As of now, we maintain our previous resolution from the last Shariah Committee meeting, which allows for AAVE's permissibility as a platform, provided the tokens involved meet Shariah standards. We will re-evaluate and update our findings after further review in upcoming meetings.

If you are uncertain about this matter or unsure which tokens are suitable for lending and borrowing, you are welcome to consult us personally for guidance on specific tokens. Otherwise, we advise refraining from engaging in lending activities or using tokens associated with lending protocols.

دع ما يريبك إلى ما لا يريبك

"Leave what makes you doubt for what does not make you doubt."

Wallahu a‘lam.

Waffaqakumullah.

Assalamualaikum Brother, Sharlife has provided detailed information regarding concerns related to Bay' al-Sarf and Riba at the "Shariah Judgement" section. You may also refer to the following link for further insights: https://sharlifeadvisory.com/insight/crypto-lending

Wa Alaikom Assalam Brother. Yes, it's on the "Shariah Judgement" I am commenting.

The basis on which it is built mixes Debt Riba with Sale Riba, which are two distinct things. Debt Riba is prohibited in any item even in lending normal commodities. In addition to that, the jusdgement does not account for important rules in Shariah such as the Rule of Cooperation قاعدة التعاون, and Sadd al-zharae' سد الذرائع.

When we talk about riba, whether riba al-duyun or riba al-bay', it only occurs if the commodities that are deemed as ribawi items. Historically, there was a term called fulus, which also acted as a medium of exchange, distinct from gold and silver. Islamic scholars deemed it as non-ribawi because one of the ‘illah of ribawi items is jins thaman ghaliban. Cryptocurrency has elicited a wide range of differing opinions among scholars. Therefore, it is important for us to approach the matter with an open heart. There is also a maxim that states: لا ينكر المختلف فيه إنما ينكر المجمع عليه ("Differences of opinion in matters of disagreement should not be condemned; only matters with consensus should be upheld.") It is normal for differences of opinion to arise in fiqh muamalat, given the nature of muamalat itself, which is: فقه المعاملات يقوم على أساس المبادئ العامة ("The jurisprudence of muamalat is based on general principles."). General principles meaning that it needs ijtihad by the Islamic scholars and occurance of different opinion in ijtihad is normal and acceptable as long as it is within furu' discussion.