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Glossary

79 terms that come up when Muslims talk about crypto, trading and Islamic finance, each in plain English. Where a term has a fuller guide or tool on Deengen, the definition links to it.

These are short explanations for learning, not fatwas and not financial advice. Where scholars differ on a ruling, ask a qualified scholar.

A

AAOIFIalso: Accounting and Auditing Organization for Islamic Financial Institutions#: The Bahrain-based body whose Shari'ah Standards many Islamic banks follow. It has issued no dedicated crypto standard. Read more: Is futures trading halal? Perpetuals, margin and leverage explained
Airdrop#: Tokens distributed free to wallet addresses, often to promote a project. Fake airdrops are a common route for scams.
Amanahalso: trust#: A trust. Wealth is held as an amanah one is accountable for, which includes keeping it safe and accessible to heirs.

B

Bay'also: bai', sale#: A sale: the exchange of property for a price by mutual consent. Most market transactions are tested against the rules of sale.
Blockchainalso: distributed ledger#: A shared record of transactions kept by many computers, with blocks linked in sequence so past entries are very hard to change. Read more: Is Bitcoin halal? A clear, scholarly-aware answer

C

CEXalso: centralised exchange, centralized exchange#: A company that runs an order book, matches trades and usually holds customers' coins. Can be licensed and supervised.
CFDalso: contract for difference#: A contract to exchange the change in an asset's price, without owning the asset. Most retail forex and gold platforms use CFDs. Read more: Is forex trading halal? Swap-free accounts explained honestly
Coinalso: native coin#: The native asset of its own blockchain, such as BTC on Bitcoin or ETH on Ethereum, used to pay fees and, on proof-of-stake chains, to secure the network.
Custodyalso: custodial, self-custody, non-custodial#: Who holds the keys. With custodial storage an exchange holds them and you hold a claim on it; with self-custody you hold them yourself.

D

DAXalso: digital asset exchange#: A digital asset exchange registered with the Securities Commission Malaysia. The SAC's 2020 permission applies to trading on registered exchanges. Read more: Kripto halal atau haram? Hukum kripto di Malaysia (2026)
DCAalso: dollar-cost averaging#: Buying a fixed amount at regular intervals regardless of price. A method for spreading entries, not a guarantee against loss.
DeFialso: decentralised finance, decentralized finance#: Financial services such as trading, lending and borrowing run by smart contracts rather than companies. Many DeFi lending products pay interest-based yield.
Derivativealso: derivatives, futures, futures contract, options, short selling#: A contract whose value comes from another asset's price, such as futures, options and CFDs. There is usually no ownership of the underlying asset. IIFA Resolution 63 (1992) rejects conventional futures, options and short selling. Read more: Is futures trading halal? Perpetuals, margin and leverage explained
DEXalso: decentralised exchange, decentralized exchange#: Software on a blockchain that swaps tokens directly from users' wallets, usually without licensing or listing checks.
Dominancealso: Bitcoin dominance, BTC dominance#: Bitcoin's share of the total crypto market capitalisation, often used as a gauge of market mood. Read more: Live halal crypto prices & Shariah screening board
Drawdownalso: max drawdown#: The fall from an account's peak value. A 50% drawdown needs a 100% gain to recover. Read more: Position size & risk calculator for halal traders

E

Expectancy#: The average result per trade in R: (win rate × average win) minus (loss rate × average loss). Negative expectancy loses over time.

F

Fatwaalso: fatawa, fatwas#: A legal opinion by a qualified scholar or council answering a specific question. Some, such as gazetted state fatwas in Malaysia, also carry legal force. Read its date and scope. Read more: Is crypto halal? The 2026 map of scholarly positions
Fear & Greed Indexalso: fear and greed index#: A 0 to 100 sentiment gauge built from market data, where low values signal fear and high values greed. Context, not a trading signal. Read more: Live halal crypto prices & Shariah screening board
FOMOalso: fear of missing out#: The urge to buy after a big price rise for fear of missing further gains. A common cause of broken trading rules.
Funding ratealso: funding#: A periodic payment between long and short holders of perpetual futures that keeps their price near spot. Common formulas include an interest-rate component. Read more: Is futures trading halal? Perpetuals, margin and leverage explained

G

Gas feealso: network fee, transaction fee#: The fee paid to a blockchain network to process a transaction, usually in its native coin.
Ghararalso: excessive uncertainty#: Excessive uncertainty in a contract about what is sold, whether it exists or whether it can be delivered. Minor, unavoidable uncertainty is tolerated. Read more: Methodology: how Deengen summarises official rulings

H

Hawlalso: haul, lunar year#: A full lunar year during which wealth stays at or above nisab before zakat becomes due. Read more: Zakat on crypto: how to calculate it
Hiyalalso: legal stratagems, hila#: Legal devices that use permissible-looking forms to reach a result the law prohibits, such as disguising an interest-bearing loan as a sale. Many scholars reject hiyal that defeat the purpose of a rule.

I

IIFAalso: International Islamic Fiqh Academy, OIC Fiqh Academy#: The fiqh academy of the Organisation of Islamic Cooperation, based in Jeddah. Its Resolution 63 (1992) on financial markets is the most cited reference on derivatives. Read more: Is futures trading halal? Perpetuals, margin and leverage explained
Ijtihad#: Rigorous scholarly reasoning to derive a ruling from the sources, especially on new questions such as crypto.
Ikhtilafalso: khilaf, scholarly difference#: Legitimate difference of opinion among qualified scholars. Common on new financial questions, including crypto. Read more: Is crypto halal? The 2026 map of scholarly positions

L

Leverage#: The ratio between a position's size and your own money. At 10x, a 10% move against you wipes out your deposit. Usually involves a loan from the platform. Read more: Is futures trading halal? Perpetuals, margin and leverage explained
Liquidation#: A forced close of a leveraged position when its margin runs out, usually locking in most or all of the deposit as a loss. Read more: Is futures trading halal? Perpetuals, margin and leverage explained
Liquidity poolalso: LP#: A pool of two or more tokens locked in a smart contract so others can swap against it, with trading fees shared among the depositors.

M

Maalalso: mal, wealth, property#: Wealth or property in the Shariah sense: something of value that people treat as property and that can be possessed. Only maal can be sold, inherited or assessed for zakat. Read more: Is crypto halal? The 2026 map of scholarly positions
Madhhabalso: madhab, school of law#: A school of Islamic law, such as the Hanafi, Maliki, Shafi'i and Hanbali schools. Rulings on finance can differ between them.
Maqasid al-Shariahalso: maqasid, objectives of the Shariah#: The objectives of Islamic law, commonly listed as protecting religion, life, intellect, lineage and wealth. Used to weigh the purpose behind rulings.
Marginalso: margin trading#: A deposit that lets you hold a larger position, or, on spot exchanges, borrowing from the platform to buy more. Interest-based margin is riba. Read more: Is futures trading halal? Perpetuals, margin and leverage explained
Market capalso: market capitalisation, market capitalization#: Price multiplied by circulating supply. A rough measure of size, not of quality or safety. Read more: Live halal crypto prices & Shariah screening board
Maysiralso: gambling, qimar#: Gambling: staking money on chance, where one side's gain is simply the other's loss. Prohibited in the Quran (5:90). Read more: Is day trading halal? An honest answer for Muslims
Memecoinalso: meme coin#: A token built mainly around a joke, community or trend, usually with no product. Its value rests largely on speculation, which raises maysir concerns. Read more: Is Solana halal? Screening SOL against the five criteria
Mufti#: A scholar qualified to issue fatwas.

N

Nafaqahalso: family support, maintenance#: The obligation to support one's dependants financially. It comes before any speculative use of money. Read more: Position size & risk calculator for halal traders
NFTalso: non-fungible token#: A token representing a unique item, such as a digital artwork or a ticket. Its permissibility depends on what it represents and how it is traded.
Nisab#: The minimum wealth before zakat is due: the value of 85 g of gold or 595 g of silver. Read more: Crypto zakat calculator (2026)

P

Paper tradingalso: demo trading, simulated trading#: Practising trades with simulated money and real prices, with no money at stake. Builds skill without financial risk.
Perpetual futuresalso: perps, perpetual swap, perpetual contract#: Crypto futures with no expiry and no delivery, held with margin and kept near spot by a funding rate. Mainstream fiqh bodies reject them. Read more: Is futures trading halal? Perpetuals, margin and leverage explained
Position sizealso: position sizing#: How much of an asset to buy: the amount you will risk divided by the distance from entry to stop. Read more: Position size & risk calculator for halal traders
Private key#: The secret number that authorises moving coins from an address. Losing it means losing access; sharing it means losing the coins.
Proof of stakealso: PoS#: A consensus method in which validators lock coins as collateral to add blocks and earn rewards, and can lose part of their stake for misbehaviour. Read more: Is crypto staking halal? The yield question, answered properly
Proof of workalso: PoW, mining#: A consensus method in which miners spend computing power and electricity to add blocks and earn new coins and fees. Used by Bitcoin.
Prop firmalso: proprietary trading firm, funded account, prop trading#: A firm that sells a paid evaluation and offers a profit share on a funded, often simulated, account. Contested among scholars. Read more: Is prop firm trading halal? Challenges, fees and simulated accounts
Purificationalso: tathir, income purification#: Giving away income that came from an impermissible source, such as the impure share of a dividend. It is separate from zakat and does not count toward it. Read more: Crypto zakat calculator (2026)

Q

Qabdalso: possession, taqabud, qabd hukmi, constructive possession#: Taking possession of what you bought. Constructive possession (qabd hukmi), such as a credit to your bank account, was accepted by the International Islamic Fiqh Academy in 1990. Read more: Is forex trading halal? Swap-free accounts explained honestly
Qardalso: loan, qard hasan#: A loan of money to be repaid in the same amount. Any stipulated benefit for the lender is riba; qard hasan is a benevolent loan with no return. Read more: Is futures trading halal? Perpetuals, margin and leverage explained

R

R-multiplealso: R#: A trade's result measured in units of the amount risked. Risk $100 and make $250: +2.5R. Stopped out as planned: -1R. Read more: Position size & risk calculator for halal traders
Ribaalso: interest, usury#: Any increase stipulated over the amount of a loan, or an unequal or deferred exchange of money or other ribawi goods. The Quran permits trade and forbids riba (2:275). Read more: Is crypto staking halal? The yield question, answered properly
Risk per trade#: The most you will lose if a trade's stop is hit, as a share of your account. Many disciplined traders use 0.5% to 2%. Read more: Position size & risk calculator for halal traders
Rug pullalso: exit scam#: A scam in which a project's creators drain its funds or dump their tokens and disappear, leaving holders with tokens that cannot be sold for value.

S

SACalso: Shariah Advisory Council, MPS, Majlis Penasihat Syariah#: The Shariah Advisory Council of the Securities Commission Malaysia, which rules on Shariah matters in Malaysia's capital market and lists 15 Shariah-compliant digital currencies. Bank Negara Malaysia has its own separate SAC. Read more: Halal crypto list 2026: the official Malaysian list, and how to screen the rest
Sadaqahalso: charity, sadaqa#: Voluntary charity given beyond zakat, at any time and in any amount.
Salamalso: forward sale#: A forward sale in which the full price is paid upfront for specified goods delivered at a set future date. A recognised exception to the rule against selling what you do not yet own. Read more: Is futures trading halal? Perpetuals, margin and leverage explained
Sarfalso: bay' al-sarf, bai' al-sarf, currency exchange#: Exchange of money for money. Both sides must be received in the same session, and amounts must be equal when the same currency is exchanged. Read more: Is forex trading halal? Swap-free accounts explained honestly
Seed phrasealso: recovery phrase, mnemonic#: A list of words, usually 12 or 24, that backs up your private keys. Anyone with it controls your coins; no legitimate service will ever ask for it.
Shariah screeningalso: halal screening, screen#: Checking an asset against Shariah criteria. Deengen uses five: riba, gharar, maysir, asset-backing and use-case. A result is not a fatwa or a buy signal. Read more: Methodology: how Deengen summarises official rulings
Slippage#: The difference between the price you expected and the price you got, common in fast or thin markets. Read more: Position size & risk calculator for halal traders
Smart contract#: A program stored on a blockchain that runs automatically when its conditions are met. Tokens, decentralised exchanges and lending protocols are built from them.
Spotalso: spot trading, spot market#: Buying an asset with payment and delivery now, or within normal settlement. You own it outright and cannot be liquidated. Read more: Is day trading halal? An honest answer for Muslims
Stablecoinalso: USDT, USDC#: A token designed to hold a steady value, usually one US dollar, backed by reserves, by crypto collateral or by gold. Its Shariah status is contested. Read more: Is USDT halal? Stablecoins, reserves and the sarf question
Stakingalso: liquid staking, delegated staking#: Locking coins to help secure a proof-of-stake network in return for rewards, with part of the stake at risk of slashing for misbehaviour. Scholars differ on native staking; lending-based 'earn' products are widely treated as riba. Read more: Is crypto staking halal? The yield question, answered properly
Stop-lossalso: stop, stop order#: A pre-set price at which you exit a trade to cap the loss. It defines risk but can fill at a worse price in fast markets. Read more: Position size & risk calculator for halal traders
Swap-free accountalso: Islamic account, swap-free, rollover, swap#: A trading account without the overnight interest charge (swap or rollover). It does not by itself remove leverage, CFD structure or the lack of delivery. Read more: Is forex trading halal? Swap-free accounts explained honestly

T

Tawakkulalso: reliance on Allah#: Trust in Allah after doing your part. In trading: a sound plan and limits first, then accepting the outcome without despair or arrogance.
Tokenalso: ERC-20#: An asset created by a smart contract on an existing blockchain. Tokens usually have an issuer, so screening also asks how proceeds are used and what rights they carry. Read more: Halal crypto list 2026: the official Malaysian list, and how to screen the rest
Trading journalalso: journal#: A record of every trade's reason, entry, stop, size, result and emotions, used to measure a method honestly.

U

'Urfalso: urf, custom#: Custom or established practice. Some scholars argue that crypto can be maal because wide public acceptance gives it value. Read more: Is crypto halal? The 2026 map of scholarly positions
'Urudh al-tijarahalso: urudh al-tijarah, trade goods, trading inventory#: Goods held for resale. They are zakatable at their market value on your zakat date. Read more: Crypto zakat calculator (2026)

V

Validator#: A participant that checks and finalises transactions on a proof-of-stake network, with coins staked as collateral. Read more: Is crypto staking halal? The yield question, answered properly

W

Wa'dalso: promise, unilateral promise#: A unilateral promise. Islamic finance uses it in some structures, such as currency hedging, as an alternative to a conventional forward contract. Its use is debated.
Walletalso: hardware wallet, cold wallet, software wallet#: Software or a device that stores your private keys and lets you send and receive crypto. A hardware wallet keeps the keys offline.

Y

Yield farming#: Moving crypto between DeFi products to collect rewards. The return often comes from lending interest or new token issuance, so each source needs checking. Read more: Is crypto staking halal? The yield question, answered properly

Z

Zakatalso: zakah#: An obligation of 2.5% on zakatable wealth held at or above nisab for a full lunar year. One of the pillars of Islam. Read more: Crypto zakat calculator (2026)