Sky
SKY#45SKY is the governance token of Sky, the protocol formerly known as MakerDAO, which issues the USDS and DAI dollar stablecoins.
Fails our Shariah screening. Needs caution: nature of the asset, excessive uncertainty (gharar), and benefit and harm (maslahah). Fails: interest (riba), business model, and usage.
- 2 pass
- 3 caution
- 3 fail
Verdict history
- Not halalCurrent
First publication
Fundamentals, market picture and news will appear here.
Halal analysis
Can a Muslim hold Sky?8 Shariah criteria
2 pass · 3 caution · 3 failThe value that reaches SKY holders comes from interest: protocol surplus from loan fees and Treasury yield funds SKY buybacks and staking rewards.
Riba means interest or any guaranteed increase on a loan. Holding SKY pays no coupon, but the value that reaches holders is funded by interest. Sky lends its USDS and DAI stablecoins against crypto collateral and charges borrowers stability fees, which DefiLlama labels interest paid to borrow; its agents such as Spark and Grove place Sky capital in tokenised US Treasuries and institutional credit; and USDC reserves in the Peg Stability Module earn yield.
Sky's own documentation says the surplus left after paying the Sky Savings Rate and expenses goes to programmatic SKY buybacks, staking rewards and reserves, and the Smart Burn Engine code splits surplus between buying SKY on Uniswap and a staking rewards farm. Buybacks passed $120 million in cumulative deployments by June 2026. Staking rewards are therefore a share of this surplus, not payment for validating a network. The Staking Engine also lets stakers borrow USDS against their locked SKY at a borrow rate (6.40% on Sky's capital-allocation page), which is an interest-bearing loan. The same logic applies to the protocol's dollars: the savings rate paid on USDS and DAI is interest (Islamic Finance Guru says earning it would be impermissible riba). The screening services that name Sky or MKR (ShariaQuant, CryptoUmmah, Islamic Finance Guru) reach the same conclusion.
SKY has a real function, governing a working stablecoin protocol, but that function is to run interest-based lending, and official bodies disagree on whether crypto is property (mal).
SKY is not an empty record: it is the voting token of a protocol with about $10 billion of USDS in circulation in June 2026 and about $12.3 billion of collateral, and it can be staked and used as collateral. That supports treating it as having value. Two things keep this at caution. First, the function SKY governs is setting the terms of interest-based loans and the savings rate, so its utility is tied to an impermissible activity. CryptoUmmah, the authoritative source, rates Sky haram, and this tie to interest is its main reason.
Second, SKY is not a claim on the protocol's reserves: holders do not own the collateral or USDS backing. The general dispute among religious bodies over whether crypto is property (mal) is reflected in confidence, not in this score.
SKY is not a gambling token: it governs a working protocol and has no chance-based mechanics.
Maysir means gambling or pure speculation; ordinary price swings are not maysir. SKY has a real governance and staking function, so it is not built for gambling. Its market value, however, rests largely on expectations about protocol revenue and buybacks, and it trades about 25% below its December 2024 high. CryptoUmmah, the authoritative source, finds Sky a real lending and stablecoin platform rather than a gambling mechanism and notes only ordinary speculative trading of SKY on secondary markets; its haram rating rests on interest, not gambling.
No concrete gambling feature was found, so the criterion gets the full score. The share of SKY trading in futures was not measured and is recorded as a data gap.
Every revenue source Sky lists is interest or interest-like: loan fees, Treasury and credit yields, and yield on reserves, far above the 5% limit.
The 5% threshold asks what share of the protocol's income comes from clearly impermissible sources such as interest. Sky's documentation lists its revenue sources as fees from agents deploying Sky capital into credit and yield strategies (the largest source, including tokenised US Treasuries through Spark and institutional credit through Grove), yield on USDC reserves in the Peg Stability Module, fees from borrowers of crypto-backed loans, real-world-asset vaults and SKY staking collateral.
Each of these is interest or interest-like income; the documentation gives no percentage split, but none of the listed sources is a service fee unrelated to lending. Gross revenue was $231.66 million in the first half of 2026. Even without an exact breakdown, interest income is far above 5%, and ShariaQuant estimates over 33%. The protocol also pays interest to depositors through the Sky Savings Rate.
Code, supply and governance votes are public, but a growing share of capital sits with off-chain credit and agent strategies that are harder to check.
Gharar means excessive uncertainty. Much of Sky is transparent: the contracts are open source, the SKY supply of about 23.46 billion is visible on-chain, the MKR conversion rate is fixed at 1:24,000, and governance decisions are public on-chain votes. Sky also publishes monthly financial updates. The uncertainty comes from elsewhere. More than $5.5 billion was deployed by Sky's agents by June 2026, including tokenised credit and funds whose underlying assets sit off-chain; CryptoUmmah points to incomplete audit coverage of newer real-world-asset lending modules.
The split of surplus between buybacks, staking rewards and reserves can change by governance vote, and Sky Reserves were at $82.5 million in June 2026, 55% of their $150 million target. How concentrated SKY voting power is was not measured for this review.
SKY's main use is to govern, and share in the surplus of, an interest-based lending and savings system.
SKY is used to vote on Sky's rules, to stake for rewards and to borrow USDS against. Each of these uses serves interest-based finance: governance sets loan fees and the savings rate, staking rewards come from the lending surplus, and borrowing against SKY is an interest-bearing loan. The protocol's stablecoins have wider uses such as payments and trading, but those are USDS and DAI, not SKY. Because the token's main purpose is interest-based finance, this criterion fails.
Fully paid spot SKY can be bought and held in one's own wallet.
SKY is an ordinary ERC-20 token on Ethereum. It can be bought on the spot market with full payment and immediate delivery and moved to a self-custody wallet, and MKR can be upgraded to SKY directly through the converter at no fee. This criterion only asks whether permissible ownership is possible; it does not make the underlying token acceptable.
Sky provides open, transparent dollar stablecoins, but it spreads interest-based credit and savings on a large scale.
Maslahah weighs public benefit against harm. Sky gives anyone access to decentralised dollar stablecoins with public collateral and publishes its finances. At the same time its whole economy runs on interest: it lends at interest, pays interest on savings, and in June 2026 alone paid $17.49 million of yield to sUSDS depositors. Its growing allocations to Treasuries and institutional credit add off-chain risk. The benefit is real, but so is the harm from an Islamic finance point of view, so this criterion is at caution.
How you can use it
Tap a card for the ruling and sourcesBuying SKY with full payment and immediate delivery is available, but spot is acceptable only for a HALAL or DOUBTFUL asset. SKY is rated HARAM because its value comes from interest-based lending and savings, and a fully paid purchase does not change that.
No exchange-traded fund holding SKY was found for this review. Any such fund would carry the HARAM rating of the underlying token.
SKY is not used as a means of payment, and tier-1 bodies such as Indonesia's MUI rule that using cryptocurrency as currency is not permissible. Payments on Sky use the USDS and DAI stablecoins, which have their own assessment.
Staking SKY in the Staking Engine is not validation work. Rewards come from the protocol's surplus, which is earned from interest on loans, Treasuries and credit, and the same vaults let stakers borrow USDS against their SKY at interest.
Margin trading in SKY is never acceptable: it is a deferred exchange with borrowed money and leverage (AAOIFI SS 20).
SKY futures, perpetuals and options, where offered, always fail under AAOIFI SS 20: deferred exchange without delivery, usually with leverage.
Lending SKY on lending markets or exchange programmes pays interest from borrowers. This is riba.
SKY yield products, including Staking Engine rewards, are funded by interest-based protocol revenue, so they fail. The Sky Savings Rate on USDS is interest as well.
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.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.The single biggest Shariah issue is Sky's revenue engine: stability fees explicitly described as "interest on debt," plus Treasury-bond yield, structurally embed riba into the protocol's core business model.Sky received a non-compliant status because it failed all three core Shariah criteria: business activity, token utility, and revenue purity.According to research and opinion of experts so far, cryptocurrency is not considered ‘ maal ’ (wealth) in Sharia.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.Muhammadiyah memandang transaksi dan investasi kripto pada dasarnya mubah (boleh) tetapi dengan syarat tertentu.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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