Haqq Network's Shariah Oracle: Pioneering Ethical Compliance in DeFi

In the presentation below, Andrey Kuznetsov, CTO and Co-founder at Haqq Network, presented on their Shariah Oracle and how the Haqq network is ensuring compliance with ethical standards in DeFi.

Below is a glossary of key concepts mentioned during Andrey’s talk, intended as a supplement to his video presentation.

WHAT IS HAQQ NETWORK?

Haqq is a scalable, high-throughput Proof-of-Stake blockchain that was built using the Cosmos SDK and is fully compatible and interoperable with Ethereum. At the heart of the platform lies $ISLM, its native asset, which is used for payments, governance, gas fees, and staking. Haqq Network aims to provide developers with the tools and flexibility necessary to create scalable and interoperable decentralized applications.

SHARIAH ORACLE

The Shariah Oracle is an on-chain mechanism that controls a whitelist of smart contract interactions through the HAQQ Wallet, minimizes unethical activity in the network, and ensures that only whitelisted, Sharia-compliant dApps are accessible to users.

The Oracle operates on community approval, which enables the project to be listed in the HAQQ Wallet Marketplace, and Shariah Approval, which allows projects to receive a Shariah Compliant label. The entire process is methodical and transparent beginning with proposal submissions, then mandatory deposits which serve as safeguards against spam, followed by a community voting phase. Successfully endorsed projects acquire a Soulbound token (SBT), signifying their compliance with the rules of the network. This blog post goes into comprehensive detail about Shariah Oracle.

EVM

The Ethereum Virtual Machine (EVM) is a decentralized, Turing-complete runtime environment that executes smart contracts and Dapps. It is often described as a virtual computer that sits on top of Ethereum’s hardware and node network layer and enables the creation of a wide range of programmable, self-executing contracts and applications that don’t rely on a central authority.

When a transaction or contract interaction is initiated, the EVM processes the code and employs a consensus mechanism called “gas” to meter and allocate computational resources.

The EVM’s intrinsic features empower developers to create a diverse range of innovative solutions, spanning finance, gaming, supply chain management, and more.

DAPPS

Decentralized Applications (dApps) are software applications that run on the blockchain and integrate smart contracts to automate and ensure the execution of predefined rules. To qualify as a dApp, the software must have:

– Open-source code and a user-controlled ecosystem

– A publicly accessible blockchain network with no central point of attack

– A cryptographic token for access and reward distribution

– A consensus method that generates tokens, such as proof-of-work (PoW) or proof-of-stake (PoS)

Many Dapps offer countless benefits such as decentralization, transparency, censorship resistance, lower costs of transactions, etc., but they also struggle with scalability and a complex user interface.

DNS HIJACKING

DNS Hijacking, also known as DNS redirection or DNS spoofing, is a malicious practice where attackers manipulate the Domain Name System (DNS) to redirect users to fraudulent websites or servers. The DNS is responsible for translating human-readable domain names (like www.example.com) into IP addresses that computers can understand. In a DNS hijacking attack, cybercriminals modify the DNS records associated with a domain and misdirect users who try to access a legitimate website to a malicious site controlled by the attacker. This can lead to various security risks, such as phishing attacks, data theft, and malware distribution.

WEB3

The evolution of the Internet began with Web1, characterized by static websites and basic information sharing before the emergence of Web2 introduced an era of dynamic user-generated content, social networking, and interactivity. Unfortunately, Web2’s advancements were accompanied by issues of centralized control, data breaches, and limited privacy protection, prompting the emergence of Web3.

Web3 is a vision of an internet landscape where users retain ownership and control over their data and digital identities. Although in its conceptual phase, this third iteration seeks to empower individuals by providing tools for secure, peer-to-peer interactions using blockchain technology, cryptographic security, artificial intelligence, automation, and smart contracts.