# Is staking halal?

There are 3 main pieces to look at when considering whether Solana staking is halal:

1. Proposing: are the fees earned from proposing halal?
2. Validating: are the fees earned from validating halal?
3. Staking service: is the contract between the staker and the staking service (eg Coinbase, Lido) halal?

To answer these questions, we need to understand the sources of yield generated through staking and analyze the permissibility of this income. 

The details of the yield earned from staking are discussed [here](/inshallah/technical-details/editor.md) but at a high level, the rewards earned by the validator nodes come from a few sources

1. Network inflation, i.e., newly minted SOL, for following the protocol rules
2. Priority fees that are paid by the transactions to encourage validators to confirm these transactions quickly.
3. Block rewards that are paid to the validator for adding a block to the blockchain.
4. MEV that comes from optimally organizing transactions within the block.

From more details on the mechanics please refer to [this article](https://www.helius.dev/blog/solana-staking-simplified-guide-to-sol-staking) by Helius.

Because part of the yield comes from confirming transactions, the purity of the yield is affected by the activities enabled by such transactions. If these transactions enable a haram activity such as Riba, the staking income is tainted. Because of that, **our view is that the current Solana staking setup is not 100% halal or at least not 100% pure**. 

The reason is pretty simple: all existing staking protocols don’t differentiate between different transaction types. That means that these blocks could include haram transactions. In fact, between 80 and 90% of the blocks produced by current Solana validators include at least one impermissible transaction from applications such as kamino, MarginFi, or other lending applications. In these lending protocols, users borrow money and pay interest on these loans. As interest is impermissible, such lending transactions are impermissible. Existing staking protocols include such impermissible transactions in their blocks by default. Hence, staking SOL with these validators empowers impermissible transactions and benefits from their fees. This contaminates the yield generated for such staking operations.\ <br>


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