!Beta version — unaudited contracts. Do not deposit real funds.

Azoth_Protocol / Docs

Technical Overview & Competitive Analysis · v1.0 · March 2026

Contents

1. Executive Summary

Azoth Protocol is a leveraged yield protocol built on Uniswap V3. It enables users to deposit a single token (e.g., WETH) and earn amplified trading fees without selling any of their asset. The protocol is deployed on Arbitrum One using Solidity 0.8.26 with the Cancun EVM target and UUPS proxy upgradeability.

Core Value Proposition

A user deposits 1 WETH. The protocol borrows the equivalent in stablecoins via an integrated CDP, deploys 2x liquidity into Uniswap V3 across three concurrent positions, and returns all earned fees to the depositor — while preserving their full ETH exposure. Without this design, a user wanting to LP with 1 WETH would need to sell 0.5 WETH for USDC first — immediately halving their ETH exposure.

Three Core Components

The protocol achieves this through three tightly integrated, ERC-4626 compliant components that form a closed loop. Each component is independently functional but designed to compose seamlessly with the others:

Component	Contract	Role	Standard
Deposit Vault	Athanor	Accepts user deposits, orchestrates the full leveraged LP position creation	ERC-4626 Vault
ALM	Transmuter	Manages Uniswap V3 positions across multiple ranges (Wide, Base, Limit)	ERC-4626 Vault
CDP	Arcanum	Provides stablecoin borrowing against ALM LP tokens	Lending Pool
Oracle	Pythia	Normalizes Chainlink prices to 18-decimal WAD precision with staleness checks	Price Feed
Router	Quintessence	User-facing entry point for all operations across registered pools	Periphery
Analytics	AzothLens	Read-only contract for comprehensive off-chain data aggregation	View-Only

Supporting Libraries

Each core contract is backed by a stateless pure-function library: AthanorLib (vault math — equity calculations, proportional unwind, slippage buffers), ArcanumLib (CDP math — fee accumulation, collateral ratios, liquidation seizure), TransmuterLib (ALM math — share calculations, liquidity computation, TWAP reads, tick management), and PythiaLib (oracle math — price normalization, staleness validation, USD value computation).

Key Design Patterns

UUPS Proxies:All core contracts (Athanor, Transmuter, Arcanum, Pythia, Quintessence) are upgradeable via the UUPS proxy pattern with OpenZeppelin's UUPSUpgradeable. Init calls are protected by initializer modifiers.

EIP-7201 Storage:The Transmuter ALM uses EIP-7201 namespaced storage layout to prevent storage collision during upgrades. Storage slots are computed via keccak256("azoth.transmuter.storage") - 1.

Reentrancy Protection:All state-changing functions across all contracts are protected with ReentrancyGuardTransient (transient storage-based), preventing cross-function and cross-contract reentrancy.

Centralized Errors:All custom errors are defined in AzothErrors.sol for gas-efficient reverts with descriptive error names (e.g., CRTooLow, TwapDeviation, SlippageExceeded, InsufficientLiquidity).

Simulation Performance

In simulation testing over a 2-year period (January 2024 – March 2026), the strategy delivered approximately 100% returns on a $2,281 deposit, significantly outperforming both passive ETH holding and standard LP positions. The Leveraged ALM reached peak PnL of approximately $3,000, while Passive LP underperformed ETH Hold in trending markets due to IL from selling half the position.