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Is USDS (USDS) halal?

Questionable

No condition fails, but 3 points remain to be verified or fall under a tolerated case.

Verdict calculated by Halal Bourse's published rules from an investigation of primary sources (project documentation, registers, decisions), conducted on 10/07/2026 and not reviewed by a human.

Open the evidence file

The asset

decentralized stablecoin (collateral-backed) Issuer: Sky protocol (formerly MakerDAO), with no single issuer; governed by holders of the SKY governance token.

Stablecoin pegged to the US dollar, an upgraded version of Dai (Ethereum contract 0xdC035D45d973E3EC169d2276DDab16f1e407384F, upgradeable proxy), created when borrowers or protocol agents draw USDS against collateral. About 6.84 billion USDS on Ethereum on October 7, 2026 according to Etherscan, 7.03 billion in total according to DefiLlama; price of 0.9999 USD.

Why this verdict

  1. Permissible purpose : to be verified or tolerated case. USDS is used to hold and transfer dollars and in many DeFi uses; no gambling or impermissible-content purpose is found. But each USDS originates from a loan (collateral deposited by borrowers or capital entrusted to agents who deploy it as credit), which ties the token's purpose to what it represents (see c2).
  2. No riba : to be verified or tolerated case. The simple USDS holder receives no yield from the token itself, but the protocol collects stability fees from borrowers and revenue from credit and real-world assets, and pays part of it to holders who go through sUSDS (rate set by governance) or deposit their USDS for agent rewards; these products are outside the spot purchase but show the origin of the yield.
  3. No gambling : met. The spot purchase is of a transferable ERC-20 token (17,314 holding addresses on Ethereum on October 7, 2026), priced at 0.9999 USD and convertible 1 for 1 into USDC through the stability module; it is not a bet on a price difference without purchase or delivery.
  4. No excessive gharar : to be verified or tolerated case. The issuance rules and the code are published, and the protocol reports collateral exceeding liabilities; but the detailed composition of the collateral (structured credit, real-world assets, agent loans, USDC in the stability module) could not be read, as the dashboard is loaded by script. S&P Global Ratings rates the stability of USDS and Dai 4 (“constrained”).
  5. Real ownership : met. USDS is held in a personal wallet; the implementation code read on Etherscan contains no address-freeze function, but the contract is upgradeable by governance (UUPS proxy) and a freeze function was mentioned by the founders in 2024, not activated at launch; minting is reserved to the protocol's authorized addresses.
  6. No fraud or manipulation : met. No sanction, regulator warning or deception of buyers was found for USDS or MakerDAO; the protocol's credit rating, the governance structure and the 2024 debate on a freeze function are reported in autres_constats without amounting to fraud.

Contract security scan

GoPlus security scan of the USDS contract on Ethereum: 17,471 holders; top ten wallets excluding exchanges and contracts 0.7%; code published. Signals noted: Contract upgradeable via proxy: the code can change after the fact (is_proxy). Reading (rule A.8): no single issuer, the Sky protocol is governed by holders of the SKY token; the minting right reserved to the protocol's authorized addresses (mint function with “auth” control) is the very mechanism of the stablecoin and not a rug pull signal; the contract is upgradeable via proxy (UUPS) by governance; GoPlus does not fill in the minting and blocking fields (“?”) and the code read on Etherscan contains no address-freeze function; the share of the top ten wallets excluding exchanges (0.7%) is low.

Opinions found during the research

Opinions reported as read, named for what they are; they do not enter into the calculation of the verdict.

What could not be verified

Sources read

Other cryptos analyzed

General information: neither investment advice nor a fatwa. Verdict calculated by published rules, from financial statements read automatically and not reviewed by a human. Read the methodology