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What is Azos

Overview​

Azos is a decentralized protocol on Base where you can mint AZUSD against your regenerative and environmental assets without selling them. Instead of liquidating your climate-positive tokens when you need liquidity, you lock them as collateral in a self-custied smart contract and mint AZUSD proportional to their value.

Azos focuses specifically on environmental and social impact assets, making it the premier DeFi protocol for climate finance and regenerative economics.

Core Concepts​

Collateral-Backed and User-Issued​

Azos works like a collateral loan but with an important distinction: AZUSD is not issued by Azos Finance. You issue it yourself against your own assets:

  • You deposit your climate-positive crypto assets as collateral
  • You mint AZUSD directly against your collateral
  • Your original environmental assets stay locked until you repay the debt
  • You keep any price gains on your regenerative collateral
  • You are solely responsible for managing your position and repaying the debt

What is AZUSD?​

AZUSD is an Asset Reference Token (ART), a designation drawn from the EU's MiCA regulatory framework. Rather than being issued by a central entity or redeemable for fiat, AZUSD references the value of the regenerative assets held as collateral across the protocol. Key characteristics:

  • Overcollateralized: Every AZUSD in circulation is backed by more than $1 of collateral
  • User-Issued: Minted by users against their own collateral, not by Azos Finance
  • Not Redeemable for Fiat: AZUSD is not a claim on fiat currency held by any issuer
  • ERC-20 Token: Works with all wallets and applications on Base
  • A Liability: When you mint AZUSD you owe it back to the protocol before your collateral can be unlocked

Supported Regenerative Collateral​

Currently Azos accepts five collateral types:

  • kVCM: Moss Earth's verified carbon market token for climate action
  • TGN: Toucan Protocol's nature-backed carbon token
  • ETH: Ethereum for broader DeFi accessibility
  • USDGLO: Global Dollar's impact stablecoin supporting financial inclusion
  • HLSP: Hyperliquid Staking Pool token

How Azos Works​

Opening a Position​

  1. Connect Wallet: Link your wallet to the Azos app on Base
  2. Choose Collateral: Select which regenerative tokens you want to use
  3. Create Safe: Deposit your assets into your self-custied smart contract
  4. Mint AZUSD: Issue AZUSD against the value of your deposited collateral

Managing Your Position​

  • Monitor Health: Keep track of your collateral-to-debt ratio
  • Add Collateral: Deposit more tokens if needed to stay above the safety ratio
  • Repay Debt: Burn AZUSD anytime to reduce your outstanding debt
  • Close Position: Repay all debt to unlock and withdraw your collateral

Key Terms​

  • Safe: The self-custied smart contract that holds your collateral
  • Collateral Ratio: The value of your collateral divided by your outstanding debt
  • Stability Fee: The annualized fee that accrues on your minted AZUSD every block
  • Liquidation: Automatic auction of collateral if your position falls below the liquidation ratio

Built on Proven Technology​

Azos is a direct fork of the HAI protocol, which itself descends from Reflexer's RAI and MakerDAO's DAI. This lineage means Azos inherits years of battle-tested architecture, real-world usage, and an extensive audit history from protocols that have secured billions in value. See our full audit lineage on the Why Use Azos page.

Environmental Impact Focus​

Azos is specifically designed for the regenerative economy:

  • Climate Finance: Supports carbon credits and environmental tokens like kVCM and TGN
  • Impact Investing: Enables liquidity for climate-positive projects without requiring asset sales
  • Regenerative Assets: Focuses on collateral that benefits people and planet
  • Sustainable DeFi: Builds financial infrastructure for the green economy

How Collateral Gets Approved​

Not every asset qualifies as collateral on Azos. Each candidate goes through two assessments before being considered for inclusion:

Risk Assessment: An evaluation of the asset's liquidity, price volatility, market depth, smart contract security, and overall risk profile. This determines whether the asset can be safely used as collateral and informs parameters like the safety ratio, liquidation ratio, and debt ceiling.

Impact Assessment Framework: An evaluation of the asset's real-world environmental and social impact. Azos is built for the regenerative economy, so collateral must meet a meaningful standard for climate-positive or socially beneficial outcomes, not just financial criteria.

Both assessments are reviewed by the Azos DAO. Collateral additions and parameter changes are governed through Aragon, currently administered by the Azos Finance multisig during the progressive decentralization phase.

Getting Started with Azos​

Ready to put your assets to work? Here is what you need:

  1. Supported Assets: kVCM, TGN, ETH, USDGLO, or HLSP tokens
  2. Web3 Wallet: MetaMask or any wallet connected to Base
  3. ETH for Gas: A small amount for transaction fees
  4. Understanding: Familiarity with collateral ratios and liquidation risks
  5. Minimum Position: At least $20 of AZUSD minted per safe

Visit app.azos.finance to begin your journey into productive regenerative asset management with Azos.