Haqq Network Community Update
Dear Haqq Network Community,
It’s been an exciting journey building an ecosystem that caters to the vast ethical crypto landscape. It is time to share an extensive update on our journey so far and our plans for the coming months. In this update, I hope to comprehensively recap the Haqq launch phase, highlight our achievements, and candidly discuss our challenges. Most importantly, I will propose our path to building a more robust and resilient Haqq Network.
Recap of launch phase:
Since official launch in October 2023, Haqq Network has experienced a series of events and challenges that have shaped our journey. To better understand upcoming, I’d like us to reflect on key milestones and lessons we have learned along the way.
1. VARA
Our launch in October 2023 was met with tremendous enthusiasm from our vast and diverse community, spanning over 1.5 million members. A community that believes in our vision of creating a blockchain ecosystem that adheres to the principles of Islamic finance.
However, our launch was met with a significant hurdle in the form of a VARA investigation. While VARA acted within its rights as a reputable regulatory body, we had initially ensured we worked circumspectly, which was our reason for selecting to work with Republic for our sale. Despite the challenges posed by the investigation, we remained committed to cooperating with the regulator and providing all necessary documentation to prove our compliance with the VARA rulebook. Our efforts eventually led to VARA announcing the end of the investigation without further enforcement, a testament to our commitment to transparency and regulatory compliance.
2. Listing Challenges and Market Conditions
As we scaled the VARA hurdle, we encountered additional difficulties in our efforts to list ISLM on various exchanges. Several top-tier exchanges that had previously committed to listing ISLM withdrew their support just before the listing date based on unfounded risks. Despite many challenges, we successfully listed ISLM on several top-tier exchanges, and we remain committed to expanding our listing strategy and improving the accessibility and liquidity of ISLM for our global community. This will be even more efficient and fruitful after the positive resolution of the mentioned regulatory matters.
3. Media Bias and Blackmail
Amidst the challenges we faced, a particular media outlet launched a targeted campaign of misinformation and slander against us. When we refused to engage with their unfounded allegations, they offered us a “promotion” in exchange for a substantial sum. We rejected this offer categorically, as it goes against our values of transparency and integrity. Despite this media outlet’s efforts to tarnish our reputation, we stand firm in our commitment to our vision and values. We will continue to fight against misinformation and Islamophobia in all its forms, united in our goal of building a more inclusive and equitable financial ecosystem.
4. Community Support and Resilience
As pointed out earlier, our community has remained our greatest strength throughout our challenges. Your unwavering support and trust in our vision have been instrumental in helping us weather the storms and emerge stronger. On behalf of the Haqq Network team, I express my profound gratitude for your resolve in our vision. Our achievements are a testament to your resilience and dedication to vision.
But Despite the challenges and obstacles we encountered along the way, the Haqq Network has achieved significant milestones that demonstrate the strength and resilience of our project:
1. Successful Token Raise:
Before our launch, we successfully raised over $200 million in a private token sale and secured an additional $200 million on an investment deed basis. This significant investment from our community and institutional partners showcased the strong belief in our vision and the potential of Islamic finance in the Web3 space.
2. Important Partnerships:
We have forged strategic partnerships with high-profile organizations in Islamic finance and Web3. These partnerships, which include collaborations with DDCAP Group, FAMBRAS Brazil, SUSHI, GoMeat, and many others, have positioned us as a leading player in the Islamic DeFi industry and provided us with valuable resources and expertise to advance our mission.
3. Growth of Community and Ecosystem:
Since our launch, our community has grown to over 1.5 million followers, making us one of the largest and most engaged communities in the Islamic finance and Web3 space. We have also made significant strides in building out our ecosystem, with the launch of the Haqq Wallet and several other key products in the pipeline.
4. Regulatory Engagement and Compliance:
Despite the challenges posed by the VARA investigation, we have remained committed to engaging with regulators and ensuring compliance with all relevant laws and regulations. Our efforts to work with VARA and provide all necessary documentation showcased our commitment to transparency and regulatory compliance, setting us apart from many other projects in the space. We’ve successfully built a regulated vehicle for stablecoin issuance and finalizing licensing processes in several key regions for upcoming activities.
Moving Forward
As we progress, I am delighted to share some initiatives we are actively exploring, focused on building on our achievements and addressing the challenges we have faced head-on. Our strategy for the coming months and years is centered around three key pillars:
1. Product Development and Ecosystem Expansion:
We are committed to delivering a suite of products and services that meet the needs of our community and advance the cause of Islamic finance in the Web3 space. Our upcoming products include:
a. Haqq Wallet: This user-friendly, feature-rich, non-custodial wallet is designed to securely store, trade, and earn rewards with ISLM tokens and other crypto assets like BTC, ETH, and various EVM assets. As a halal yield app, it enables users to stake their ISLM and earn yields that can be natively swapped into BTC, ETH, OSMO, and other supported assets. Looking ahead, we aim to enhance user engagement by integrating lifestyle features tailored to local markets, further increasing retention and frequency of use.
b. Telegram Bot: A convenient way for users to acquire ISLM tokens directly within the Telegram app, lowering the barrier to entry for new users and facilitating the creation of Telegram-based wallets and basic functions like token swaps.
c. Together with our partner Brighty™, we have launched VISA cards denominated in ISLM for European residents. Moving forward, we are initiating a pilot project in select countries with limited access to fintech, enabling the prepaid Visa cards denominated in ISLM and stablecoins on Haqq Network.
d. Real-World Assets (RWA): We’re set to launch our gold token in June 2024, allowing users to exchange it for real physical gold with delivery. This token will be accessible through the Haqq Wallet and is designed as an appealing value store product. It will also serve a practical role in the Islamic Interbank Market, where banks can utilize tokenized commodities as a more efficient alternative to classical ones for interbank financing. Moving forward, we aim to expand this offering to include other commodities and potential securities in the future.
e. P2P Loans: We are developing a halal version of a lending platform inspired by the framework of existing renowned platforms to facilitate peer-to-peer (P2P) lending. Loans play a critical role in enabling business growth, especially in regions where access to traditional banking services is limited. By providing a platform for P2P loans, we aim to stimulate growth within the informal economy, a sector that thrives in many areas where Haqq’s products and vision are gaining traction.
2. Strategic Partnerships and Collaborations:
We will continue to forge vital partnerships and collaborations with leading organizations in the Islamic finance and Web3 space. The main areas we are excited to explore include blockchain-based solutions for Islamic financial institutions:
- Smart contract-based Murabaha transactions to streamline processes, reduce paperwork, and ensure Sharia compliance.
- Tokenization of assets for Musharakah and Mudarabah contracts, enabling partnerships and profit-sharing arrangements based on real-world assets.
- A commodity-fueled Tawarruq platform, leveraging our Gold and other commodity tokens to facilitate Sharia-compliant transactions between Islamic financial institutions, brokers, and traders.
- Sharia-compliant asset-backed tokens, Sukuk issuance and management solutions.
We are actively enhancing expert advice to help us develop these products, ensuring they meet the needs of the Islamic finance industry.
3. Community Engagement and Education:
We recognize that our community is our greatest treasure, and we are committed to fostering a vibrant and engaged community that is in tandem with Haqq Network’s growth. In our next phase, we will roll out various community engagement and education initiatives, from local meetups, online forums and robust educational content. All these will align with our mission to help our community learn and benefit from the Haqq Network’s expansion. To drive adoption and growth, our localisation strategy will target key regions, including Nigeria, Indonesia, Turkey, and Malaysia.
4. Vesting Module Amendments:
One of the key challenges we have experienced due to the launch circumstances is the vesting schedule and the potential impact of large token allocations hitting the market in a short period. To address this issue and ensure the long-term stability and growth of the ISLM token, we are introducing an on-chain proposal to amend the current vesting module.
History of the Problem:
During the pre-listing stage, we implemented a vesting schedule that we believed would be sufficient to ensure a gradual distribution of tokens. The initial vesting period was set to 2 years, with a gradual release of tokens starting from the date of token transfer. However, the challenges we faced during our launch phase, including the VARA investigation, adverse market conditions, and other unforeseen circumstances, have led us to come to understand that the original vesting plan does not provide sufficient time to adapt to these challenges and allow us the necessary terms to build momentum and establish a sustainable ecosystem in the face of such obstacles.
As a result, a significant number of tokens are being released simultaneously, putting pressure on the market and negatively impacting the ISLM in the secondary markets. This rapid release of tokens has made it challenging to maintain stability and foster long-term growth.
Proposal:
To address this concern, we’ll make an on-chain proposal adjusting the vesting period, specifically for those with unlocking schedules concluding in 2026 and later. This amendment will reduce these schedules' monthly token allocations entering the market. It’s important to note that this change exclusively affects tokens distributed before the public listing.
In the event of proposal execution, all accounts with currently vested ISLM for which the full unlock date is after 1 Jan 2026 (including founders, advisors, team members and treasury) will have an extended unlock schedule — it will be extended by 1095 days (3 years) so that instead of the original 2-year unlock schedule, it will become 5 years. Several strategic partners who initially had a 5 years unlock schedule will be updated to 8 years. The total number of tokens will not change; only the vesting schedule of currently locked tokens will change.
This proposed adjustment will deliver several key benefits:
1. Long-term stability: By reducing the number of tokens released each month, we can mitigate the potential for large sell-offs and maintain a more stable token price. This stability is crucial for fostering confidence in the Haqq Network and encouraging long-term holding among our community members.
2. Sustainable ecosystem growth: The extended vesting period will provide us with adequate runway to develop our core products, establish strategic partnerships, and expand our ecosystem. By aligning the token release schedule with our development roadmap, we can ensure that the growth of the Haqq Network is sustainable and driven by fundamental value creation.
3. Alignment with stakeholder interests: The amended vesting schedule will better align the interests of our token holders, advisors, and contractors with the long-term success of the Haqq Network.
The proposed vesting module amendment reflects practices observed in successful blockchain platforms that have encountered challenges after their initial launches. These platforms have responded by implementing prolonged vesting schedules for token holders to prevent large allocations from flooding the market too quickly.
By extending the vesting period, these platforms have fostered more stable and sustainable ecosystems. Such measures allow teams to concentrate on developing their platforms, forging crucial partnerships, and enhancing adoption, alleviating the pressures associated with short-term price fluctuations.
By following a similar approach, we will position the Haqq Network for long-term success and create value for all of our stakeholders.
Make Your Voice Heard
I believe strongly that the proposed vesting module amendment is crucial for the long-term success of the Haqq Network and the ISLM token. By extending the vesting period, we can create a more stable and sustainable ecosystem that benefits our stakeholders.
The Haqq Network team and I encourage all ISLM token holders to participate in the upcoming governance vote to support this important proposal. Together, we can lay the foundation for a stronger, more resilient Haqq Network that delivers on the promise of Islamic finance in the Web3 space.
In Closing:
As I look back on the Haqq Network's journey so far, I’m filled with gratitude for the support and trust of our community and the dedication of team members and advisors. Despite the challenges we’ve faced, we remain more committed than ever to our mission of building a more inclusive, transparent, and equitable financial ecosystem based on the principles of Islamic finance.
We know that the road ahead is not without its obstacles, but we are confident that with the support of our community and the strength of our vision, we can overcome any challenge and achieve our goals. We are excited to continue working with all of you to build the future of Islamic finance in the Web3 space.
Thank you for being a part of the Haqq Network community. Together, let’s build a truly inclusive and ethical DeFi economy.
Sincerely,
Alex Malkov and The Haqq Network Team
Voting Link:
