Azoth Overview
Rundown of how Azoth works on-chain
Last updated
Rundown of how Azoth works on-chain
Last updated
Azoth is a public, fully decentralized and professional RWA ecosystem, Azoth's core functional design focuses on asset compliance, token structure innovation and full-cycle risk control. Deals on Azoth typically follow a common lifecycle from initial asset listing to final principal repayment.
All issuers who want to issue real-world assets on the Azoth platform will first be screened by Azoth’s risk control team after submitting their materials. A referendum will then be held on the platform to determine the real-world assets that will be listed.
Select institutions, called issuers, can self-publish new investment opportunities on the Azoth, detailing information about the deal, its investment terms and capital requirements.
When the deal is listed on the Azoth, it is immediately made accessible to permissioned investor types and an ERC-20 smart contract is spun up to represent the deal on-chain. Issuers are able to configure compliance requirements on the deal's smart contract that define what investor types are able to access and invest in the deal. Tokens cannot be transferred to addresses that do not meet the deal's minimum compliance requirements.
In addition, information about the real-world assets will be attached to the transaction’s equivalent smart contract as metadata that can be read on IPFS. For example, this information will include the type of underlying asset, opening date, regulatory region, minimum investment amount, transaction description, etc.
After reviewing the transaction information, the primary investor can make an offer to obtain an allocation. After the subscription offer is issued, the subscription offer will be approved when the total investment amount of its subscription target is within the value of the issued assets and the investor meets the KYC requirements, otherwise the issuer will review the offer and accept, reject or modify it. After the subscription offer is approved, the investor will be required to finalize the commitment to the legal investment transaction and sign the subscription agreement for the transaction.
When making a subscription or redemption offer, investors define how they wish to send or receive funds associated with the transaction. Investors who wish to fund via wallet will be required to pre-fund the transaction commitment at the same time as making an investment offer in USDC.
Investors who wish to fund via wire transfer/bank account will be required to fund their commitments after the transaction is completed. Depending on the transaction, the issuer may request funds from the committed investors over time (withdrawal) or immediately after the investor finalizes the transaction commitment (rollover).
After the transaction is completed, the issuer confirms receipt of the investor's funds, and the transaction token representing the ownership will be minted and distributed to the investor's preferred address. If an event occurs that deems the investor's wallet "risky", such as failing review, the transaction will fail.
As a deal approaches maturity and begins to wind down, issuers will start repaying deal investors. For crypto-native investors, issuers send USDC to a deal smart contract which disburses funds to deal investors. For off-chain investors, issuers wire funds directly to the investor's preferred bank accounts.
Upon the investor's receipt of funds, asset tokens will be burned and removed from circulation where if only 5% of a deal is being paid back, only 5% of an investor's deal tokens will be burned and removed from circulation. Once a deal's principal has been fully repaid, all deal tokens will be burned and removed from circulation.
Investors can redeem their investment ownership before maturity. They can freely choose to redeem on the Azoth platform or sell directly in a third-party liquidity pool.
Investors can initiate the redemption process on the Azoth platform, and redemption requests may be approved or rejected. When the issuer approves the redemption request, the investor's trading tokens will be locked and an NFT representing the redeemed asset token will be received, pending redemption proceeds.
As a USDC liquidity provider, the issuer can deposit/withdraw liquidity from the liquidity pool at any time to provide redemption liquidity. Assuming the issuer accepts the redemption request, investors can redeem their asset tokens. When such redeeming investors deposit asset tokens, USDC will be exchanged for the investor's asset tokens and the trading ownership will be transferred back to the issuer.
In certain open trading scenarios, issuers can buy back asset tokens from investors and remove them from circulation via token burns.
