STEPN: halal or haram?

Questions about cryptocurrencies and their place in Islamic finance models are constantly being raised. There is still no unambiguous answer to many of these questions and Muslim scholars can't say whether cryptocurrencies are halal or not. Some coins and ways of obtaining them are unequivocally regarded by Muslim theorists as haram, while others, on the contrary, have signs of halal and Muslims may well use them when paying for goods, services and when making transfers. With the development of blockchain and the emergence of new types of digital assets, the issue of their halal status should also become an occasion for discussion in the Muslim community. One of such questions should be the question of the possibility of Muslims participating in the STEPN project. And if you don't know what it's all about, it's time to know.

What Is STEPN?

STEPN is a blockchain-based NFT game app focused on healthy lifestyle control, with Game-Fi and Social-Fi elements. The user receives an NFT token in the form of a trainer and can then earn in-game currency by running and walking outdoors. The funds earned can either be used to increase earnings in the app or can be withdrawn and sold. STEPN is the kind of game that allows you to earn money while taking care of your health. The entry threshold into the game is quite high. To start playing, you need to buy an NFT item, which costs between 2.5 and 10 SOL, or between $300 and $1200. According to the developers, the investment pays for itself in two to three weeks after you start using the app. In fact, if you lead a fairly active lifestyle, it will happen sooner. Thereafter, you can start earning. This project is really worth paying attention to. There are two types of tokens available to players in STEPN. GMT is a management token that allows users to increase their income. GST is an in-game token that users receive for in-game activity.

Is it possible to use NFT and work with it?

The concept of fungibles and non-fungibles has been addressed at length by the Islamic jurists and schools of Islamic law. In summary, fungibles are called Mithliyyat in Fiqh, whilst non-fungibles are called Qimiyyat. A fungible (Mithliy) is that property or asset which has an identical or near-identical asset available in the markets, such that its units are generally considered interchangeable and therefore the pricing between the units have very little discrepancy and variance if any[i]. Examples of this include all standardised products such as cars of the same make, model and year, laptops of the same make, model and year, mobile phones of the same make, model and year etc. In essence, a fungible has another identical in form (surah) and substance (Ma’na); the appearance, the utility and the underlying value are found in several units of this genus, hence making it fungible. Mithliy has also been translated as homogeneous property.

A non-fungible (Qimiy) is that property or asset which does not have an identical or near-identical asset to it in its form (surah). Examples of this include animals of same genus, unique items such as a dress designed and made for one person, a painting or calligraphy which is unique. Qimiy has also been translated as heterogeneous property. If a person’s fungible item is destroyed by a third party, the first remedy is a like-for-like replacement, because a near-identical is present in the markets. Whereas, if a non-fungible item is destroyed by a third party, only the market value of the item is paid as damages, as an identical replacement is not possible. Whilst this is a developing field and the Fiqh will evolve as more NFTs are introduced, the following are basic Fiqh principles which highlight some of the considerations that will go into analysing NFTs.

In principle, the permissibility or impermissibility of an NFT will rest upon what the NFT is composed of; what is the non-fungible? If the non-fungible is Shariah compliant in and of itself, then assuming no other issue is found, the NFT would be considered compliant. However, if an NFT was composed of something non-compliant or there were potential extrinsic issues which could risk Shariah non-compliance, then such an NFT may be classed as non-compliant. An NFT must represent an acceptable form in Shariah.

When reviewing NFTs, scholars will generally be considering the following principles:

1. Maliyyah – something which reasonable people have an inclination towards and can be retrieved when needed.

2. Taqawwum – something which has a lawful utility and benefit.

3. Manfa’ah Maqsudah – In the discussion of services, the jurists stipulate that the utility of something must be such that it is sensible and commonly sought after by people. It should not be something that the Shariah objects to or reasonable people would not seek such utility.

4. Extravagance (Israf) and wastefulness (Tabdhir).

5. Any potential wider Shariah infringements.

6. The Impact of investing in such assets, and how it impacts the remaining wealth of a person to fulfil their Islamic duties and obligations in particular to maintaining oneself and their family.

A definitive or generalised view on all collectibles is not possible nor accurate as collectibles differ and vary. Thus, some general principles for now seem to be the best course of action.

Thus, an NFT collectible should:

1. Represent something which is lawful and Halal.

2. Not be something futile and mere amusement.

3. Have a genuine utility which is of worldly benefit or spiritual benefit.

4. Not be something which the Shariah would consider a waste of money, extravagance or wastefulness. Something may have financial value, but it may not have utility from a Shariah lens. Shariah has a paradigm and framework when it comes to understanding value and utility. The utility and perceived value of something must align with the principles of Shariah, otherwise this risks being falling under the prohibition of squandering of wealth in useless and trivial things. The perfection of a person`s faith and obedience is in his abstinence from that which is useless and brings forth no goodness.

NFTs are still a developing concept. The above is by no means an exhaustive list of the use cases. As the industry grows, the knowledge around NFTs will develop and greater insights on the different use cases will emerge. What will be most interesting and fruitful is the NFTs for Shariah purposes; where non-fungibles that add value to people’s lives and afterlives are developed and invested in. That is really the ultimate success in NFTs, and it is in such areas investments should take place in from a Shariah perspective. Investing in futile and objectionable areas serves no real purpose and can well fall into the purview of squandering, wasting the blessings of Allah.

Game process

If the use of NFT is a question that can be interpreted in different ways, the gameplay of STEPN itself has many similarities with gambling projects. And they are strictly forbidden in Islam. In Islam, gambling is not considered to be a simple game or frivolous pastime. The Quran often condemns gambling and alcohol together in the same verse, recognizing both as a social disease which is addictive and destroys personal and family lives.

“They ask you [Muhammad] concerning wine and gambling. Say: ‘In them is great sin, and some profit, for men; but the sin is greater than the profit.’… Thus does Allah Make clear to you His Signs, in order that you may consider” (Quran 2:219).

“O you who believe! Intoxicants and gambling, dedication of stones, and divination by arrows, are an abomination of Satan's handwork. Eschew such abomination, that you may prosper” (Quran 5:90).

“Satan's plan is to excite enmity and hatred between you, with intoxicants and gambling, and hinder you from the remembrance of Allah, and from prayer. Will you not then abstain?” (Quran 5:91).

Conclusion
Muslim scholars agree that it is acceptable or even commendable for Muslims to participate in healthy challenges, competitions, and sports. It is forbidden, however, to be involved with any betting, lottery, or other games. Along the same lines, some scholars consider it permissible to play certain games, such as backgammon, cards, dominoes, etc. as long as there is no gambling involved. Other scholars consider such games to be impermissible by virtue of their association with gambling. The general teaching in Islam is that all money is to be earned—through one’s own honest labor and thoughtful effort or knowledge. One cannot rely upon “luck” or chance to gain things that one doesn’t deserve to earn. Such schemes only benefit a minority of people, while luring the unsuspecting—often those who can least afford it—to spend great amounts of money on the slim chance of getting more. The practice is deceptive and unlawful in Islam.