Sharia Capital Standard (SCS)

Open infrastructure-grade risk-sharing capital formation primitive for EVM & SVM networks

Overview

SCS provides production-ready smart contract implementations for Sharia-compliant capital formation, implementing AAOIFI standards for:

• SCS-1: Mudarabah (manager-investor profit-sharing)
• SCS-2: Musharakah (joint venture capital)
• SCS-3: Profit-Sharing Vault Engine (NAV calculation, epochs)
• SCS-4: Non-Guaranteed Return Enforcement Layer
• SCS-5: AAOIFI Governance & Compliance

AAOIFI Compliance

This project implements standards from the Accounting and Auditing Organization for Islamic Financial Institutions:

• Sharia Standard #8: Mudarabah (profit-sharing partnership)
• Sharia Standard #12: Musharakah (joint venture)
• Sharia Standard #17: Investment Agencies
• Governance Standard #3: Internal Sharia Review
• Financial Accounting Standards: FAS #4, #9, #27

Project Structure

Sharia-Capital-Standard/
├── evm/                    # EVM implementation (Solidity)
│   ├── src/
│   │   ├── interfaces/     # Core SCS interfaces
│   │   ├── SCS1/          # Mudarabah ✅
│   │   ├── SCS2/          # Musharakah ✅
│   │   ├── SCS3/          # Vault Engine ✅
│   │   ├── SCS4/          # Enforcement Layer ✅
│   │   ├── SCS5/          # AAOIFI Governance ✅
│   │   └── libraries/     # Shared libraries
│   └── test/              # Comprehensive test suite
└── solana/                # SVM implementation (Anchor)
    └── programs/

Installation

For Foundry Projects (Recommended)

Install as a Foundry dependency:

forge install tawf-labs/Sharia-Capital-Standard

Add to your remappings.txt:

@sharia-capital/=lib/Sharia-Capital-Standard/evm/src/

Import in your contracts:

import "@sharia-capital/SCS1/MudarabahPool.sol";
import "@sharia-capital/SCS2/MusharakahPool.sol";
import "@sharia-capital/SCS3/VaultEngine.sol";
import "@sharia-capital/SCS4/SCSEnforcement.sol";
import "@sharia-capital/SCS5/AAOIFIGovernance.sol";

For Hardhat/npm Projects

Install via npm:

npm install @tawf-labs/sharia-capital-standard
# or
yarn add @tawf-labs/sharia-capital-standard

Import in your contracts (clean style):

import "@tawf-labs/sharia-capital-standard/SCS1/MudarabahPool.sol";
import "@tawf-labs/sharia-capital-standard/interfaces/ISCS1.sol";

Or use direct paths:

import "@tawf-labs/sharia-capital-standard/evm/src/SCS1/MudarabahPool.sol";

Access ABIs in JavaScript/TypeScript:

const MudarabahPoolABI = require('@tawf-labs/sharia-capital-standard/evm/out/MudarabahPool.sol/MudarabahPool.json');

For Development

Clone the repository to contribute or run tests:

git clone https://github.com/tawf-labs/Sharia-Capital-Standard.git
cd Sharia-Capital-Standard

# Install dependencies
forge install

# Build contracts
forge build

# Run tests
forge test

# Run tests with gas report
forge test --gas-report

Usage Example

// Create Mudarabah pool
MudarabahFactory factory = new MudarabahFactory(enforcementAddress);

address pool = factory.createPool(
    usdcAddress,
    managerAddress,
    capitalProviderAddress,
    2000, // 20% manager share (basis points)
    8000, // 80% provider share (basis points)
    "USDC Mudarabah Pool",
    "MDP-USDC"
);

// Deposit capital
MudarabahPool mudarabah = MudarabahPool(pool);
usdc.approve(pool, 1000e6);
mudarabah.deposit(1000e6);

// Deploy to strategy
mudarabah.deployCapital(strategyAddress, 500e6);

Core Concepts

Mudarabah (SCS-1)

Manager-investor profit-sharing model where:

• Capital provider (Rabb al-Mal) provides capital
• Manager (Mudarib) manages investments
• Profits shared by pre-agreed ratio
• Losses borne by capital provider (except misconduct)

Musharakah (SCS-2)

Joint venture model where:

• All partners contribute capital
• Profit ratio can differ from capital ratio
• Loss ratio MUST equal capital ratio (AAOIFI requirement)

Vault Engine (SCS-3)

ERC-4626 compliant vault with:

• Epoch-based accounting
• NAV calculation
• Strategy management

Enforcement Layer (SCS-4)

Ensures Sharia compliance by:

• Prohibiting guaranteed returns
• Preventing fixed-yield structures
• Validating profit-sharing ratios

AAOIFI Governance (SCS-5)

Implements AAOIFI Governance Standard #3:

• Sharia Supervisory Board (SSB) oversight
• Multi-signature approval for investments
• Prohibited asset screening
• Financial ratio validation

Documentation

• SCS-1: Mudarabah Specification
• SCS-2: Musharakah Specification
• SCS-3: Vault Engine Specification
• SCS-4: Enforcement Layer
• SCS-5: AAOIFI Governance
• AAOIFI Compliance Guide
• Integration Guide

Security

• Comprehensive test coverage (100%)
• Fuzz testing (256+ iterations)
• Invariant testing
• ReentrancyGuard protection
• Role-based access control
• Static analysis via Aderyn in CI
• External audit recommended before production use

Security Analysis

This project uses Aderyn, a Rust-based Solidity static analyzer by Cyfrin, to automatically detect potential vulnerabilities in the codebase.

Automated CI Checks:

• Aderyn runs automatically on every push and pull request
• Builds fail on high-severity findings
• Analysis reports are available in GitHub Actions logs

Local Analysis (Optional):

Developers can run Aderyn locally for immediate feedback:

# Install Aderyn (requires Rust)
cargo install aderyn

# Run analysis on the project
aderyn .

# View the generated report
cat report.md

For more information, see the Aderyn documentation.

See SECURITY.md for reporting vulnerabilities.

Contributing

See CONTRIBUTING.md for contribution guidelines.

License

MIT License - see LICENSE for details.

Disclaimer

This is reference implementation software. Users must:

1. Conduct independent Sharia compliance review
2. Obtain qualified Sharia Supervisory Board approval
3. Complete security audits before production deployment
4. Ensure compliance with local regulations

References

• AAOIFI Official Website
• AAOIFI Sharia Standards
• AAOIFI Governance Standards
• AAOIFI Financial Accounting Standards
• ERC-4626 Tokenized Vault Standard
• OpenZeppelin Contracts

Contact

For questions or collaboration: Create an issue