TLD Whitepaper
  • Part I: What is The LifeDAO?
    • Introduction
    • Mission
    • Background
      • Islamic finance and insurance
      • Why is conventional insurance not shariah-compliant?
      • Takaful, an Islamic alternative to conventional insurance
        • Takaful vs. Conventional Insurance
        • Takaful in light of the Shariah
    • The LifeDAO: Inspired by Takaful, native to the blockchain
      • Two Funds, Two Entities
      • Risk, Solvency and the Benefit Multiplier
      • Shariah compliance of TLD
    • The Takadao Protocol
      • Takadao’s Technology Stack
      • Takadao Reprotection Pool
  • PART II: The LifeDAO Membership
    • Member Journey
    • The LifeDAO Membership
      • Membership Benefits
      • Membership Privileges
      • Benefit 1: Benefit Payout
      • Benefit 2: Surplus Distribution
      • Benefit 3: Governance Rights
      • Privilege 1: Verifier Incentive Program (VIP)
      • Privilege 2: Contributor Committee
      • Privilege 3: TAKA Token Airdrops
      • Allocation of Membership Contributions
      • Benefits Payout Management
      • Governance and the Contributor Committee
      • Contributor Functions
        • Screen Proposals
        • Endorse and Advocate for Proposals
        • Implement Proposals through Multisig
      • The LifeDAO Investment Pools
        • Investment Conditions
        • Deposit and Withdrawal Mechanisms
        • Governance
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  1. Part I: What is The LifeDAO?
  2. Background

Islamic finance and insurance

PreviousBackgroundNextWhy is conventional insurance not shariah-compliant?

Last updated 4 months ago

Islamic finance is most easily understood in contrast to conventional finance. The global financial system is underpinned by interest-based principles that result in systems. These systems reward spending today and penalize saving for tomorrow. Islamic finance abstains from , in favor of wealth preservation and growth through equity investments and the sharing of risk. While it is not within the scope of this paper, it is arguable that , stemming from widening financial inequality both within and across nations.

constitutes 6% of global banking today, making incredible strides from its modest . And yet, room for growth is enormous. Muslims today comprise 24% of the global population and are projected to grow to 31% by 2060. Even if Islamic finance served only the “niche” Muslim audience, it should still grow to catch up with the population. Currently, Islamic finance boasts an , accelerating much faster than traditional finance.

Considering the advent of Bitcoin, cryptocurrencies and blockchain technologies, it appears that Islamic finance is poised to grow beyond expectations. The anti-inflationary fundamentals of Bitcoin and the ethos of decentralization are giving new tools upon which to build Islamic finance. Never has there been a better time to start reformulating global finance according to Islamic principles, that promise a return to social justice and happier societies.

When it comes to finance, the Shariah is a prohibitive code that is focused on defining what is prohibited, instead of legislating what is not prohibited. As such, . The main shariah prohibitions in finance are:

  • Prohibition of Riba (interest)

  • Prohibition of Gharar (uncertainty)

  • Prohibition of Maisir/Qimar (gambling)

  • Prohibition of Taghrir (deception)

inflationary
riba, or interest
Islamic finance offers the answer to today’s social justice issues
Islamic banking
beginnings in the late 1970s
annual growth rate of 14%
anything that is not specifically prohibited is therefore allowed