There are quite a number of things in life which are simply and undeniably stronger together than they are apart. This article focuses on exposing one such pairing: Blockchain and Waqf.
Now most of you are probably wondering, what does charitable Islamic endowment have to do with a digital ledger of records (or blocks)? I am here to explain how the two actually live in a symbiotic relationship that has the potential of benefitting one another.
Let me take you back to a point in history, specifically the Ottoman era, when the establishment of Waqf derived outstanding results and benefits in terms of enriching the welfare of an individual throughout his or her lifetime. And through the Waqf foundation system, buildings and lands were used to provide education, medical services, water and other essential services to those in need and develop the capital, and as a result the Ottoman Empire succeeded in eliminating poverty for centuries. Waqf used to play this significant role in improving the lives of individuals, societies and economies, but it is no longer the case today.
The Waqf landscape in the contemporary world is plagued with issues of liquidity, transparency, and mismanagement, all of which constrains the full utilization of the potential of Waqf and impedes the complete development of the projects. For years, experts have tried to solve these issues but to no avail. This is of course until February 2019, when a technology-based organisation called Finterra, launched its flagship product, the “WAQF Chain”. It had managed to develop a blockchain with Waqf as its use case.
Finterra formulated a platform designed to tackle all of the issues mentioned earlier, by harnessing the blockchain technology to raise capital for the development of Waqf projects. The arrival of technological advancements such as blockchain has given people hope for the revival of the glory days of Waqf in the modern world. Enabling the donation of cash Waqf solved the problem of unproductive and immobilised Waqf properties, because the money donated are used for Projects or Causes which provides never-ending benefits to the ummah.
One of the main advantages of blockchain technology is the total transparency offered in the distributed ledger, where every transaction is recorded publicly and individuals who are provided authority can view the transactions. Users who donate on the WAQF Chain platform can track their contributions from the moment it is gifted until the beneficiaries have reaped the rewards. Moreover, using the “smart contract”—a computer programme or algorithm that automatically executes itself when the predefined conditions are met—could further enhance the performance and efficacy of the Waqf institution, while also increasing the security, providing transparency and adherence to the Waqf stipulations.
This relationship between blockchain and Waqf is a two-way street and therefore both reap benefits from one another. One of the key challenges facing blockchain is the lack of knowledge of the technology and how it works, which is why the adoption and applications of blockchain technology garners interest and raises awareness in each sector. As a result, the concept of Waqf can go a long way in enhancing the legitimacy and image of the blockchain technology, therefore, more banks, investors and potential clients would be willing to work with blockchain-based companies.
In a nutshell
Utilising blockchain for Waqf projects and using Waqf for blockchain is beneficial to others who are impacted by this union. Donors suddenly have a trusted platform to do good and earn perpetual rewards for their actions. People in need are positively affected by the donations made, because cash Waqf can pool liquid donations to build institutions like a madrasa, hospital and orphanage. Other blockchain companies can also benefit when reputation of the blockchain technology is drastically improved as a result.
For more information, read about WAQF Chain.