MUSC is a singular financial project marketing itself as targeting the needs of a population estimated at 1.3 billion. We will evaluate this claim for the project which seeks to offer a compliant DeFi solution according to Islamic Finance - much like the role of "Islamic Banks" in the established finance industry. In this post I will analyse the MUSC project, and rate it in terms of the 'Execution' criteria in the SVET framework. This rating is conducted from an unsponsored, unbiased perspective and serves merely an informative purpose- not as financial advice (!)
Recap of Framework
The framework is designed for technology analysts to be able to assign as close to an objective rating as possible on the merits of a project.
Within the review of a project's 'Execution', the following criteria is assessed:
SVET Vision Rating:
- 'Solution': What is this project's business model? How does it make money?
- 'Validity': What is the current legal status / form of this project? Where and when has it been registered?
- 'Equity': What is project's Assets, Equity and Liabilities? What are its Profits? What is its current valuation?
- 'Team': What is project's Team? How experienced. knowledgeable and trustworthy is it?
The rating is assigned from a scale of a, b and c, with the +/- variant indicating a strong/ weak performer respectively in that category.
Execution Review
Solution
‘Muslim Coins’, operating within a niche of the industry - Islamic-compliant finance - seeks to leverage the present reluctance of many Muslim communities concerning cryptocurrency involvement by introducing a solution which is compatible with religious investors’ interests, and scores a ‘b’ in the ‘Solution’ deep.
The positively contributing factors include the ripe general topography of Islamic finance, where “cryptocurrencies sit uneasily within Islam”, most notably because “they are products of financial engineering and objects of speculation” (Reuters, 2018). By offering ‘compliant’ services, the project firstly wins the trust of conservative Muslims, but secondly, also provides a compelling service which does not yet exist in that market: the ability to pay ‘zakat’ (charity-tax obligation for Muslims) directly on transactions (Muslim Coins, 2021). This is an essential feature as the reconceptualising of crypto from speculative asset to currency “is important for Islamic tax payments… Zakat” (Reuters, 2018).
On the other hand, many of the aforementioned positives may actually be seen as weaknesses in the business model, as interest-yield free also, at least in the eyes of CEO Sharif, implies the inability to partake in conventional staking mechanisms: “We don’t have staking… Staking for us is riba (charged interest)” (Sharif, 2021). This may dissuade conventional cryptocurrency investors, including, established ‘whales’ and large-scale participants that are likely to contribute the majority of the immediate liquidity. Furthermore, “only around 20 to 30 percent of banking in the Gulf and Southeast Asia follows Islamic principles; many Muslims use conventional finance if it offers higher returns or more convenience” (Reuters, 2018).
Despite these negatives, the rating of ‘b’ (‘Solution’) is justified as the market-share should still prove impeccable even if it were limited to “20 to 30 percent” of the Islamic World, especially considering key products in the pipeline such as the ‘Muslim Coins’ app and debit cards with a sneak-peek even revealing integrated ads within the former which target users for other religiously relevant goods and services.
Validity
The present form for the project warrants a b+ ‘Validity’ rating, mostly stemming from its infancy stage at present yet with a couple key milestones that have either been actualised or are being planned.
It is fully audited by third-party launchpad ‘Space Seed’ which is also responsible for other crypto launches adding to its validity (SpaceSeed.finance, 2021). However, it lacks any official registrations and audits with country-specific authorities, which is crucial considering that it will come across a multitude of states in a quest to reach the greatest population within the Muslim world. At present, these are not all accepting of the crypto landscape as aforementioned (Reuters, 2018) and their sentiment up until recently can be described as falling just short of sceptical.
Yet the project can be granted a b+ ‘Validity’ rating as unlike centralised finance, it may not need this regulation whilst operating within DeFi space and the more relevant element to this rating is that of religious approval: a ‘Fatwa’ certificate. It can be seen as promising still in this light, despite the lack of such an aforementioned certificate, doing well to draw upon the opinion of “a college that took place in Indonesia in 2018 around Mufti Muhammad Abu Bakar… a fatwah declaring that cryptocurrencies are indeed in compliance” (Muslim Coins, 2021). What holds it back from the upper category is official recognition from Islamic and state-level authorities.
Equity
The project scores a c+ within this deep with ‘Equity’ at present being fairly low but the stage set for improvement with a dedicated team which have been committed to working without profit or significant capital-backing for the past 8 months before presale (Sharif, 2021).
It achieved a hard cap target of 40BNB after it’s second presale, which was chaotically arranged after an underwhelming first presale which accomplished only 16% of its target (Sharif, 2021). Despite even this being a questionably low figure in light of its overall goal of becoming the base currency for crypto transactions in the Muslim world (Muslim Coins, 2021), one must note the surprising growth within a space of a couple weeks, which can be attributed to an influx of new community members after the first presale. The low-capital marketing investment, often as low as 50USD a day (Sharif, 2021), can be seen as responsive in terms of attracting new community members.
This is not enough however, to upgrade the rating from a below average ‘Equity’, with the project not having actualised any profit for its team, but the prospects do look better with a skilled team that adds no liabilities as they are willing to work for free, and a continuing influx of community members (c+).
Team
A touted strength, but one with need of consolidation, arises from the ‘Team’ as it is rated ‘a-‘ due to its trustworthiness and knowledge, yet with the need for better community managers.
The team is fully doxxed (Muslim Coins, 2021) which is not common nor always recommended for the safety of the team within the crypto sphere, and yet does add to the trustworthiness. Furthermore, there is complete correspondence both on the telegram channel as well as through private messages to the team, including the CEO who is active the majority of the day on the community channels. However, there is a need, in the interests of complete critique, to employ dedicated community managers much like other crypto projects who have specialised skills in maintaining the decorum of professional projects and can add benefits such as a broader linguistic inclusion within the community. This is very much needed for this project as it seeks to unite many different people from across countries.
Additionally, the majority of the team has 10 to 15 years of dedicated experience in their departments, including from firms such as Tesla (Muslim Coins, 2021). This is perhaps why the defining characteristic of trustworthiness is further accented by confidence and openness with the CEO unafraid to reveal that only 16% of the first presale target had been met, nor transparently have revealed token distribution: “If this was for rug pull purposes, do any of you believe that we would have announced clearly "15% for team?" We choose to be honest. We built a website, a roadmap, a whitepaper, as comprehensive as possible, we even doxxed” (Sharif, 2021).
The effect of this transparency and experience, in the present crypto climate where new projects can often cause disappointment in the form of rug pulls and large-scale scams should they not be properly monitored, is what I feel continues to earn the trust of proponents otherwise belonging to crypto-sceptical Muslim communities. However, as aforementioned, there is need to better manage the project’s community channels as it only continues to grow and draws interest going into it’s Probit listing leaving the ‘Team’ rated an ‘a-.’
Verdict
Solution (b), Validity (b+), Equity (c+), Team (a-).
References
Muslim Coins, 2021. Homepage. [Online] Available at: https://muslimcoins-ico.com/ [Accessed 28 August 2021].
Muslim Coins, 2021. Whitepaper. [Online] Available at: https://muslimcoins-ico.com/wp-content/uploads/2021/08/WHITEPAPER-EN-10082021.pdf [Accessed 28 August 2021].
Reuters, 2018. Islam and cryptocurrency, halal or not halal?. [Online] Available at: https://www.aljazeera.com/economy/2018/4/8/islam-and-cryptocurrency-halal-or-not-halal [Accessed 28 August 2021].
Sharif, 2021. The First Presale [Interview] (28 August 2021). SpaceSeed.finance, 2021.
Muslim Coins. [Online] Available at: https://spaceseed.finance/ [Accessed 04 September 2021].
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