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description: >-
  As an RWA (Real World Assets) asset platform, the design and governance
  mechanism of the Azoth platform embodies a high degree of professionalism,
  risk control capabilities and innovation.
---

# Why Azoth?

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Azoth is based on two key observations:

1. **Endogenous defects of virtual assets.** The lack of a value anchor and regulatory vacuum for virtual assets, such as cryptocurrencies, lead to systemic risks and inherent flaws within the virtual asset system. On one hand, their prices are highly dependent on market sentiment and speculative hype (such as the wild fluctuations of Meme coins), lacking support from physical assets or cash flows, thus turning into a "digital casino". On the other hand, their anonymity and cross-border liquidity make them a breeding ground for money laundering and tax evasion, while the frequent collapses of centralized exchanges (like FTX's bankruptcy) expose the flaws in the custody mechanism. More crucially, virtual assets have failed to address the pain points of the real economy, becoming a closed financial game within itself.
2. RWA (Real-World Assets) tokenization faces multiple challenges: **at the property level,** the ownership of on-chain tokens is disconnected from the off-chain legal registration, and cross-border judicial conflicts lead to unclear rights confirmation; **at the valuation level,** the **supervision and valuation of some assets are not transparent**; **at the compliance level,** project parties use DeFi anonymity to evade securities supervision, and investor protection mechanisms are missing; **at the liquidity level,** the lack of depth in the secondary market, the lock-up period of underlying assets and cross-chain technical bottlenecks lead to difficulties in cashing out; **at the risk pricing level,** the lack of historical data makes the liquidity risk premium underestimated, and the market blindly amplifies the risk of collapse. These problems threaten asset security and market stability, and urgently need collaborative innovation of technology and financial models.
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<table><thead><tr><th width="167.5">Dimension</th><th width="228">Existing RWA Projects</th><th>Azoth</th></tr></thead><tbody><tr><td><strong>Asset Type</strong></td><td>Single (Focused on single asset/region)</td><td>Diversified (Global asset portfolio)</td></tr><tr><td><strong>Screening Method</strong></td><td>Project-determined</td><td>User-determined</td></tr><tr><td><strong>Organizational Structure</strong></td><td>Centralized</td><td>Decentralized</td></tr><tr><td><strong>Innovation Tools</strong></td><td>Basic Tokenization</td><td>Web3 Financial Tools</td></tr><tr><td><strong>Accessibility</strong></td><td>High (Traditional KYC)</td><td>Low (Web3 KYC)</td></tr></tbody></table>

&#x20;                                                RWA Projects Comparison

## Built-in Value Anchors & Regulatory Safeguards

**Purpose:**&#x20;

Address the endogenous flaws of virtual assets—volatility driven by speculation, regulatory voids, and detachment from real-world value—by integrating intrinsic value foundations and enforceable compliance frameworks.

**How It Works:**

**Real-World Value Anchors:**

Virtual assets are tethered to tangible economic activities or collateral reserves. For instance, stablecoins are backed by diversified portfolios rather than single fiat reserves, while utility tokens link to revenue-sharing agreements (e.g., distributing a percentage of platform profits to token holders). Algorithmic mechanisms dynamically adjust supply based on demand and collateral health, curbing extreme price swings like those seen in "Meme coin" volatility.

**Compliance-by-Design Infrastructure:**

Smart contracts autonomously enforce jurisdictional rules (e.g., automated tax withholding, transaction caps) and flag suspicious activity to regulators in real time, balancing anonymity and regulatory requirements through privacy-preserving zero-knowledge proofs.

**Decentralized Custody and Risk Mitigation:**

Hybrid custody model combines user-controlled multi-signature wallets (for daily use) with institutional-grade custodians (for block reserves), minimizing FTX-style concentration risk.Transparent on-chain audits continuously verify collateralization ratios and custody integrity.

**User Benefits:**

Asset-backed value floors and algorithmic stability mitigate "digital casino" speculation risks. Global transactions avoid money laundering and regulatory issues through embedded compliance tools. Hybrid custody and transparent audits build trust and safeguard assets. Regular valuation reports keep users informed about net value, interest rates, and returns, enhancing transparency.

## Liquidity & Flexibility in RWA Asset Investments

**Purpose**: Liquidity is crucial to the success of tokenized assets. At Azoth, we enhance liquidity through partnerships with reliable providers. We cater to investors' diverse risk tolerances by ensuring a broad spectrum of investment opportunities.

**How It Works:** Our platform thoughtfully divides the underlying assets into "ownership tokens" and "income rights tokens". Azoth’s trading features enhance liquidity options for RWA tokens, including staking, lending, borrowing and pure investments.

**User Benefits:** Users can choose different tokens according to their risk preferences. They can also participate in asset trading with reduced slippage and improved asset stability, taking advantage of opportunities for liquidity and yield in the RWA market.

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