Sharia-Lending (Coming Soon)

In most stablecoin systems, minting is your entry point. Deposit collateral, receive stablecoins, done. But what happens when minting is paused, either to protect the peg or due to regulatory constraints?

That’s where the Tharwa lending module comes in.

Why Borrow thUSD?

At first glance, it may seem redundant. Why borrow thUSD when you could just mint it?

The answer is: you can’t always mint.

Minting thUSD is designed to be supply-constrained by default. It’s not an open faucet. When market conditions get volatile or thUSD trades below peg, the protocol can limit or pause new minting entirely. This is a deliberate peg defense mechanism — a way to avoid overexpansion and runaway dilution.

But users still need access to thUSD — whether for yield strategies, payments, or liquidity. That’s where borrowing steps in.

By enabling borrowing during these constrained periods, Tharwa ensures thUSD remains usable even when it’s no longer mintable.

A Different Kind of Lending

This isn’t your typical DeFi lending market. We’re not introducing variable interest rates, liquidation thresholds, or recursive loops.

Instead, the lending module is being designed to support asset-based, interest-free borrowing, drawing from established principles in faith-aligned finance.

When live, borrowing will be facilitated through structures like:

• Murabaha (Cost-Plus Sales)

Users acquire thUSD by purchasing an asset from the protocol at a markup, payable in installments. The markup is fixed and transparent — no compounding interest, no hidden fees.

• Ijarah (Leasing Contracts)

Instead of borrowing thUSD directly, users lease an income-generating asset (or its cash equivalent) and receive thUSD as the lease payout. Once the lease term ends, ownership reverts or is transferred depending on the structure.

• Other Asset-Based Structures

Tharwa may also implement other compliant models — such as wakala (agency agreements) — where users appoint the protocol to invest on their behalf, receiving stablecoin liquidity in return.

All models are designed to:

• Avoid interest (riba)

• Avoid excessive uncertainty (gharar)

• Be tied to real economic activity

• Remain composable across DeFi

When Would Borrowing Be Used?

The lending module becomes especially important in moments like:

• Peg stress: Minting is paused to maintain stability.

• Vault overflow: High demand has maxed out mintable thUSD, but users still want exposure.

• Fixed-income structuring: Users want to access thUSD through pre-agreed markups rather than dynamic borrowing rates.

• Faith-aligned capital: Borrowing aligns with Islamic finance principles and expands the protocol’s accessibility to Shariah-sensitive markets.

thUSD: Still Scarce, Still Valuable

It’s worth reiterating: borrowing doesn’t dilute the system. thUSD issued through lending is still:

• Backed: Tied to real economic exchange, not synthetic inflation

• Limited: Subject to issuance caps and reserve thresholds

• Structured: Deployed under clear, predefined contract logic

This ensures that thUSD retains its core properties, scarcity, transparency, and real backing, even when it’s borrowed instead of minted.

A Note on Shariah Compliance

While Tharwa is actively exploring faith-aligned borrowing structures like Murabaha and Ijarah, it’s important to clarify: these modules have not yet been certified as Shariah-compliant.

We’re designing the system to be compatible with Islamic finance principles — avoiding interest, speculation, and ambiguity — but full compliance requires independent certification, and that process takes time.

Our goal is to make the architecture certifiable, with clear asset-backing and structured profit mechanisms. We’re working toward that — but until certification is granted, we don’t claim compliance.

If and when that certification is obtained, it will apply specifically to segregated vaults or lending modules designed for that purpose. We’ll be transparent about which parts of the system are included — and which are not.

For now, consider this an exploratory, ethics-aligned path, not a guaranteed or certified product line.

Who Is This For?

The lending module is being designed with multiple user segments in mind:

• Retail users looking to access thUSD without overcollateralizing crypto

• Faith-aligned capital seeking access to compliant borrowing structures

• Protocols and DAOs who want stablecoin liquidity without relying on market-dependent minting

• Institutions that require structured borrowing mechanisms tied to real assets

Whether you’re an individual or an allocator, the goal is simple: provide a structured, ethical, and predictable way to access thUSD even when the minting gate is closed.