Opinion by: Daniel Ahmed, co-founder of Fasset and founding member of the Own Foundation
Cryptocurrency emerged with the goal of decentralizing power and democratizing finance. However, as the industry evolved, speculation often overshadowed its original purpose. Now, it’s crucial to revisit crypto’s foundational values and prioritize long-term value, inclusivity, and ethics, especially by learning from ethical financial investing in emerging regions.
The Importance of Ethical Foundations in Crypto
The rapid growth of layer-2 and layer-3 solutions promises scalability and efficiency. However, it’s essential to question whether innovation is driven by genuine utility or merely speculative gains. Web3 should focus on solving fundamental issues in emerging markets like the Middle East, Southeast Asia, and Africa.
In these regions, individuals face challenges such as inflation, high remittance fees, and limited access to financial services. Web3 technologies, including stablecoins and user-friendly payment applications, offer a unique opportunity to address these problems by creating decentralized financial systems that bypass the inefficiencies and inequities of traditional banking.
To make a meaningful difference, Web3 must prioritize ethics, accessibility, and long-term utility. Innovation should create meaningful disruption that improves people’s lives and addresses real-world problems.
What Does Innovation Truly Mean in Web3?
For crypto projects, innovation should extend beyond fundraising rounds and transaction speeds. It should focus on addressing real-world problems faced by individuals in emerging markets, where even simple financial transactions can be challenging.
Web3 offers the potential to transform the daily lives of millions by providing secure and user-friendly payment applications and decentralized financial systems. However, it must be designed with a focus on ethics, accessibility, and long-term utility.
Drawing Inspiration from Ethical Finance Models
Ethical finance, particularly Islamic finance, provides valuable insights for Web3. Dating back centuries, Islamic finance is based on risk-sharing, ethical investment, and a focus on tangible assets. This model rejects speculation in favor of real, meaningful value.
Institutions like Al Rajhi Bank exemplify this approach, investing in tangible assets and community-oriented financial products. Web3 can learn from this model and prioritize morals, substance, and necessity over purely financial opportunities.
Key Principles of Ethical Finance that Can Guide Web3:
- Risk-Sharing: Sharing both profits and losses among stakeholders.
- Ethical Investment: Investing in industries that align with ethical and moral values.
- Focus on Tangible Assets: Prioritizing investments in real, meaningful assets rather than speculation.
- Community-Oriented Approach: Developing financial products and services that benefit the community.
- Transparency and Fairness: Ensuring that financial systems are transparent and fair to all participants.
Building a Better Future for Web3
As Web3 enters a new phase, it’s crucial to redefine success and innovation. Shared values should extend beyond technical achievements and market capitalization. The industry must strive to innovate something more significant than any specific technology or token.
Before launching new products or services, Web3 projects should consider how they will improve people’s lives and contribute to creating decentralized systems that are transparent, fair, and built for the benefit of all.
By embracing ethical finance principles, Web3 can create a more sustainable and impactful future.
Practical Steps for Implementing Ethical Finance in Web3:
- Develop Ethical Investment Frameworks: Create guidelines for ethical investment that align with moral and social values.
- Promote Transparency and Accountability: Implement transparent and accountable systems to ensure fairness and prevent fraud.
- Support Community-Driven Initiatives: Invest in projects and initiatives that benefit local communities.
- Educate Users on Ethical Finance Principles: Provide education and resources to help users understand and embrace ethical finance.
- Collaborate with Regulators and Policymakers: Work with regulatory bodies to establish clear guidelines for ethical finance in the Web3 space.
Opinion by: Daniel Ahmed, co-founder of Fasset and founding member of the Own Foundation.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
