Is liquidity providing halal in Islam?
Question context
CoinStudy's answer
Research opinion from the CoinStudy Sharia team. Not a fatwa.
Our Shariah Board Chairman ruled directly: "Liquidity provision is permissible if given for the purpose of partnership and trade AND if it is known that the liquidity will be used in a permissible place." Two conditions must both be satisfied. Both assets in the pool must be permissible. The trading activity must serve legitimate commercial purposes. A USDC/ETH pool fails because USDC is Haram-classified. An ETH/SOL pool satisfies both conditions. Meteora Dynamic AMM fails because their own documentation confirms assets are deployed into external lending protocols for interest income. Pure fee-based LP in permissible pairs is Halal With Concerns. Linking LP to lending is Haram.