Dai
DAI#25DAI is a decentralised US dollar stablecoin created by the Sky protocol, formerly MakerDAO.
Does not clear all 8 Shariah criteria. Needs caution: interest (riba), excessive uncertainty (gharar), and usage. Fails: business model.
- 4 pass
- 3 caution
- 1 fail
Verdict history
- DoubtfulCurrent
First publication
Fundamentals, market picture and news will appear here.
Halal analysis
Can a Muslim hold Dai?8 Shariah criteria
4 pass · 3 caution · 1 failHolding plain DAI pays nothing, but every DAI is created as a fee-bearing loan and the built-in Dai Savings Rate pays depositors out of interest-type protocol income.
Riba means interest or any guaranteed increase on a loan. A person who simply holds DAI receives nothing extra, and Islamic Finance Guru (IFG), the authoritative source for DAI, rates DAI itself permissible while treating the Dai Savings Rate as a separate product it does not endorse. The interest is real, though: every DAI is minted as a vault loan on which the borrower pays a stability fee, and since November 2019 any holder can deposit DAI in the Dai Savings Rate and earn a return paid from that fee income and other interest-type protocol revenue (lending, credit and fixed-income
strategies). Uptake of the DAI savings wrapper is small, about 139 million sDAI (roughly $164 million, under 4% of DAI supply) on 27 September 2026, but DAI converts 1:1 to USDS, whose staked form sUSDS held $5.52 billion of the $10.04 billion USDS supply at the end of June 2026. Following IFG, plain holding is not treated as interest, so the criterion is caution rather than fail; the interest built into DAI's creation and its optional savings rate keep it out of pass.
DAI is a working dollar token backed by collateral, and IFG, the authoritative source for DAI, rates it permissible.
Mal is property that Islamic law recognises as having value and that can be owned and traded. DAI has real use as a dollar-stable token, and $12.3 billion of collateral stood behind DAI and USDS at the end of June 2026. Official bodies disagree about whether cryptocurrency in general is mal: Malaysia's Securities Commission Shariah Advisory Council (2020) treats digital currency as tradable goods on registered exchanges, while Egypt's Dar al-Ifta (2017), Turkey's Diyanet (2017), the UAE General Authority of Islamic Affairs (2018) and Indonesia's MUI (2021) prohibit dealing in it; none of them
names DAI. That general dispute is reflected in confidence, not in this score. IFG describes DAI as fundamentally a cryptocurrency with nothing obviously problematic about using it, so the criterion gets the full score.
- Sky Protocol: Capital Allocation & the Sky Savings Rate (Sky Ecosystem Insights)
- Sky Protocol Achieves 2nd Straight Quarter with Over $100M in Revenue (Sky Frontier Foundation, PR Newswire)
- Resolutions of the Shariah Advisory Council of the SC - Securities Commission Malaysia
- Keputusan Ijtima' Ulama Komisi Fatwa se-Indonesia VII tentang Hukum Cryptocurrency - Majelis Ulama Indonesia
DAI is designed to hold a steady dollar value and is used for payments, savings and settlement, not for betting on price.
Maysir is gambling: winning or losing by chance rather than through productive exchange. DAI has no chance-based payout, and because it tracks the dollar there is little to speculate on in holding it; it is mainly used to hold value, pay, and settle trades in decentralised finance. Its price has strayed from $1 in stress, from $0.88 in March 2023 to $1.22 in March 2020, but ordinary price risk is not maysir. No gambling feature was found, so the criterion gets the full score.
The protocol earns mainly from stability fees on loans and from lending, credit and fixed-income investments, far above the 5% limit for impermissible income.
This criterion asks how the issuer or protocol earns. Sky's documentation describes its revenue engine as the spread between the stability fees it charges borrowers and the yield it pays savers, and says its collateral includes structured credit, fixed income, on-chain and fintech lending and real-world assets, much of it placed through Sky Agents such as Spark and Grove. Stability fees accrue on vault debt and become protocol surplus. The Sky Frontier Foundation reported $107.35 million of gross revenue for the second quarter of 2026.
An exact split by source was not obtained, but interest on loans and interest-bearing investments is the protocol's main business, well above the 5% threshold. IFG rates DAI permissible to hold, but acknowledges that the way DAI is created is open to discussion; this criterion records that documented interest income, so it fails.
DAI's contract and on-chain vaults are public and cannot be changed, but a large part of the backing sits in off-chain and agent-managed investments that are harder to verify.
Gharar is excessive uncertainty or hidden information in a deal. Much of DAI is transparent: the token contract on Ethereum is verified, is not upgradeable and has no freeze or blacklist function, supply is public, and crypto vaults can be checked on-chain. Governance changes go through public votes. The uncertainty lies in the rest of the backing: real-world assets, USDC held through the Peg Stability Module, and capital deployed by independent Sky Agents into credit and fixed-income strategies depend on off-chain parties, and no primary breakdown of the collateral mix was found.
The peg has also broken briefly under stress (March 2020 and March 2023).
DAI is used as a dollar for payments and trading, but a notable share of its use is borrowing against collateral and earning the savings rate.
This criterion looks at what the asset is actually used for. DAI serves as a dollar-stable means of holding value, paying and settling trades on decentralised exchanges, which are permissible uses, and IFG sees nothing obviously problematic in using it. A notable part of its life, though, is interest-based: it is minted through fee-bearing loans, deposited into the Dai Savings Rate, and lent in DeFi markets. The main purpose is not impermissible, so the status is caution rather than fail.
DAI can be bought outright, held in one's own wallet and swapped 1:1 into USDS, though Binance has replaced it with USDS.
This criterion asks whether the asset can be owned in a permissible way. DAI is an ordinary ERC-20 token held by about 700,000 Ethereum addresses; it can be bought with full payment on exchanges and decentralised exchanges, withdrawn to a self-custody wallet, and converted to USDS and back at a fixed 1:1 rate with no fee. Binance converted its users' DAI to USDS by mid-2026, so on some large exchanges buying DAI now means buying USDS, but that limits venues rather than the validity of ownership. Ownership does not depend on derivatives or leverage, so the criterion gets the full score.
DAI gives open access to a dollar token that no single company can freeze, with moderate harm beyond the interest counted elsewhere.
Maslahah weighs public benefit against harm. DAI offers anyone a transparent, dollar-stable token whose contract cannot freeze or seize balances, which helps people without good access to dollars and supports open payment and settlement. The spread of interest-based credit and leverage is counted under riba and business model; the remaining concrete harm is peg risk in market crashes, when DAI has broken from $1, which keeps the score just below the maximum. No link to fraud or sanctions evasion as a main use was found.
How you can use it
Tap a card for the ruling and sourcesBuying plain DAI with full payment and immediate delivery, and holding it in one's own wallet, is acceptable for a DOUBTFUL-rated asset and is what IFG approves. Do not deposit it in the Dai Savings Rate or convert it to staked USDS, which pay interest-type income.
No exchange-traded fund holding DAI was found. Any fund that lends DAI or earns the savings rate on it would fail.
DAI is used for payments and settlement, but tier-1 bodies such as Indonesia's MUI rule that using cryptocurrency as currency is not permissible, and several countries ban crypto payments.
DAI has no validation staking. Products called staking for DAI are usually deposits into the savings rate or lending pools, which pay interest-type returns and should be judged as yield or lending.
Margin trading with DAI is never acceptable: it is a deferred exchange with borrowed money and leverage (AAOIFI SS 20).
Futures, perpetuals and options on or settled in DAI always fail under AAOIFI SS 20: deferred exchange without delivery, usually with leverage.
Lending DAI on DeFi markets or exchanges pays interest from borrowers, and borrowing DAI from a Sky vault means paying a stability fee on the loan. Both are riba.
The Dai Savings Rate, sUSDS and similar products pay a return funded by stability fees and interest-bearing investments, so they fail. Screening firms that reviewed DAI all reject the savings rate.
Scholars quotes
Penggunaan cryptocurrency sebagai mata uang hukumnya haram, karena mengandung gharar (ketidakjelasan), dharar (bahaya) dan bertentangan dengan Undang-Undang nomor 7 tahun 2011 tentang Mata Uang dan Peraturan Bank Indonesia nomor 17 tahun 2015 tentang Kewajiban Penggunaan Rupiah di Wilayah Negara Kesatuan Republik Indonesia.Sebagaimana mata wang yang lain, mata wang digital hendaklah tidak digunakan sebagai bayaran kepada barangan, perkhidmatan dan aktiviti tidak patuh Syariah seperti pembelian dadah, pelacuran, perjudian dan pendanaan aktiviti keganasan serta penggubahan wang haram.The SAC has also resolved that investment and trading of Digital Assets that fulfil the above requirements and which are traded on Digital Asset Exchange (DAX) registered with SC are permissible.Third: In light of the above and given the significant risks associated with this type of currencies and the instability of their transactions, the Council of the Academy recommends pursuing research and studies on issues affecting its ruling.Bitcoin is a digital currency that does not meet the legal and Sharia criteria that make it a currency subject to the rulings of dealing with official legal currencies recognized internationally.بناءً على ذلك: فلا يجوز شرعًا تداول عملة "البتكوين" والتعامل من خلالها بالبيعِ والشراءِ والإجارةِ وغيرها، بل يُمنع من الاشتراكِ فيها؛ لعدمِ اعتبارِها كوسيطٍ مقبولٍ للتبادلِ من الجهاتِ المخُتصَّةِ، ولِمَا تشتمل عليه من الضررِ الناشئ عن الغررِ والجهالةِ والغشِّ في مَصْرِفها ومِعْيارها وقِيمتها، فضلًا عما تؤدي إليه ممارستُها من مخاطرَ عاليةٍ على الأفراد والدول.Simply buying and holding the token is deemed Haram because it directly supports a protocol whose core business activity and primary revenue generation are explicitly based on interest-bearing lending and traditional finance treasury yields.According to research and opinion of experts so far, cryptocurrency is not considered ‘ maal ’ (wealth) in Sharia.Muhammadiyah memandang transaksi dan investasi kripto pada dasarnya mubah (boleh) tetapi dengan syarat tertentu.While buying the DAI token on an exchange may be considered halal, people should proceed with caution when getting involved in the DAI ecosystem.The opinion on this is the same as doing the same with any halal assets such as shares – 1) is permissible, 2) is more debatable and there are differing opinions on short-term trading.Our current position is 'tawaquf'; we can't say it is halal or haram, but we say it is better not to engage in itAs I mentioned at the beginning of this article it is not necessary to substantiate the permissibility of something as long as there are no prohibited factors involved in it or surrounding it.AI-assisted analysis checked against sources. Not a fatwa or investment advice.
Where it trades
Section in preparation
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