Cryptonews Sponsored

Deenar: A Gold-Backed Stablecoin, Providing Shariah-Compliant Investment Options

Editor for Partnerships

Mao Orillana

Editor for Partnerships

Mao Orillana

About Author

Mao is the Editor for Partnerships and Sponsored Content at Cryptonews. With five years in the crypto industry, she collaborates with partners to bring the latest updates and insights to our readers.

Author Profile

Last updated:

August 12, 2024

Why Trust Cryptonews

Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews

Disclaimer: The text below is an advertorial article that is not part of Cryptonews.com editorial content. While it has undergone editorial review to ensure quality and relevance, it may not reflect the views of Cryptonews.com and is clearly distinguished from our independent editorial content. If you wish to advertise with Cryptonews, contact us.

Stablecoins come in various formats. Many of the most popular stablecoins are backed by the United States dollar and offer a decentralized method of holding fiat currency. However, there are also stablecoins backed by other cryptocurrencies, algorithms, and even gold. Gold-backed stablecoins have seen quite an uptick, with prominent projects like Tether getting involved.

Gold-pegged stablecoins track and are tied to the value of physical gold. While one can always invest in physical gold itself, the process is cumbersome and requires quite a few steps. Stablecoins allow anyone to invest in the value of gold with little effort — the most accessible way to invest in the precious metal.

Deenar, the first gold-backed stablecoin within the Cosmos network, is a project looking to innovate on the asset class.

What Is Deenar?

Deenar is part of the HAQQ ecosystem, which is built on Cosmos. The project aims to enhance the ownership of real-world assets (RWAs) like gold through blockchain technology, providing users with a store of value that’s easily accessible via a cryptocurrency. Deenar is compatible with the rest of the HAQQ network, meaning that investments in DEEN can spread to other HAQQ projects.

Every Deenar Gold (DEEN) token is backed 1:1 by a gram of real gold. Brinks asset management stores the physical gold in Dubai-based vaults, and Deenar is planning its first Shariah audit to verify the gold via a third party.

Dennar’s gold-backed stablecoin provides additional utility to the value of gold, allowing investors to buy it in fractional amounts. Such an opportunity brings old forms of investment into the modern fintech area with more capabilities than ever before.

Boasting a Shariah advisory board, Deenar is 100% Shariah-compliant. All of the company’s funds abide by Islamic principles and can be considered socially responsible.

How Does Deenar Work?

As mentioned, DEEN draws its value from the real-time price of gold. The asset is built according to Ethereum’s ERC-20 token standard on top of the HAQQ Network blockchain.

Every DEEN transaction executes according to the network’s smart contract programming. Investors can buy or sell DEEN at any time, as well as redeem it for physical gold ingots equivalent to their investment.

There is a total supply of 12,000 DEEN tokens, with each token representing 1 gram of SAM Precious Metal 999.9 purity gold. The Fiduciary Standard, a regulated stablecoin issuer in Switzerland, creates or destroys tokens as needed.

Physical gold ingots are tied to each DEEN wallet address that holds tokens. Holders can log into the Deenar website to view information on their gold, such as its serial number and physical appearance.

Deenar vs. Traditional Gold

Traditional gold investments are becoming increasingly difficult to get involved with. It is expensive to store physical gold, often requiring the investor to pay for private security. From there, it’s not easy to access one’s holdings.

Digital gold removes the need for investors to pay for physical storage, making the asset far more accessible. Such accessibility inherently increases gold’s liquidity, and the HAQQ blockchain allows for instant, feeless transactions. The storage maintenance is taken care of by Brinks, ensuring the investor can passively hold their gold and generate profit.

Changing The Face of Stablecoins

With the rise of the gold-backed stablecoin, investors can get involved no matter their financial situation. They can invest regardless of location all while avoiding expensive storage and transaction fees — and not to mention avoiding the volatility associated with most cryptocurrencies and alternative asset classes. The project is a leading attempt in banking the 800 million unbanked Muslims around the world.

In terms of Deenar, those investments turn into liquidity on the HAQQ network. HAQQ Dapp developers can then harness that liquidity, resulting in a stronger, more profitable network overall.

Deenar offers these benefits while remaining entirely Shariah-compliant, opening up an ethical investment avenue for Muslims. It’s a project developing a unique solution to a long-term issue, and one that may change the stablecoin market after its launch.