Is yield farming halal in Islam?
Question context
CoinStudy's answer
Research opinion from the CoinStudy Sharia team. Not a fatwa.
Yield farming cannot receive one universal ruling. The compliance outcome depends entirely on which yield sources the specific strategy involves. Fee-based liquidity provision in permissible asset pairs earning only trading fees is Halal With Concerns under the chairman's LP ruling. Lending-based yield farming is Haram directly. Automated vault strategies including lending components are Haram. Leveraged yield farming is Haram. Governance token farming from prohibited protocols is Haram through economic dependence. The majority of yield farming as practiced in DeFi fails Islamic finance red-line screening. Only pure fee-based LP in permissible pairs passes the chairman's two-condition test.
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