Daylight, a decentralized energy startup backed by a16z crypto and Framework Ventures, has launched Tuesday a new protocol on Ethereum that aims to turn electricity into a yield-bearing crypto asset.
The protocol, dubbed DayFi, aims to create “capital markets for decentralized energy,” Jason Badeaux, founder of Daylight, told CoinDesk in an interview.
The rise of data centers, robotics, electric vehicles and autonomous fleets set to dramatically increase power demand, while installing new capacity in the old-fashioned way is too slow and cumbersome today, Badeaux explained.
“Energy is becoming a bottleneck to progress,” he said. “Distributed energy offers the fastest path and the cheapest path to scaling energy production and storage on power grids today.”
DayFi’s model aims to bridge DeFi capital with the growing need for distributed, resilient energy systems.
Bringing RWAs onchain
The move fits into a broader trend of tokenizing real-world assets (RWAs) like U.S. Treasuries, funds, and now solar power, creating novel capital markets on blockchain rails through decentralized finance (DeFi) protocols and stablecoins.
Distributed energy systems face their own challenges, including high soft costs and complex, education-heavy sales cycles, Badeaux noted. According to Daylight, roughly 60% of the cost of a typical residential solar installation comes not from hardware, but from customer acquisition and other inefficiencies.
To tackle this, DayFi is applying crypto-native tools such as token incentives and permissionless vaults to coordinate capital and scale infrastructure.
Badeaux said Daylight’s model brings together incentives, financing, and standardization onto one network, making distributed solar more accessible to users and more usable by grid operators and power traders.
“That’s building a new type of financial instrument, one you can’t access in traditional markets unless you’re one of the few large banks underwriting huge securitizations of distributed energy portfolios,” Badeaux said.
How DayFi works
At the core of DayFi is the use of two tokens: GRID and sGRID.
GRID is a stablecoin built on M0’s tech stack and is fully collateralized by U.S. Treasuries and cash. It does not pay yield.
sGRID, the yieldcoin, is a derivative that combines Treasury interest with the actual revenue generated from Daylight’s solar installations. Deposits are locked for two months using vault infrastructure provided by Upshift and managed with curation strategies by K3. The capital investors deploy are lent out against tokenized rights to the cash flows of energy infrastructure.
From the investors perspective, they can deposit stablecoins into smart contract vaults. Those funds are used to finance rooftop solar and battery systems. Revenues from these energy systems — generated through long-term power contracts, grid incentives and participation in virtual power plants — are tokenized and returned to depositors in the form of a yield token.
Daylight currently is active in Illinois and Massachusetts, with plans to expand to more regional markets across the U.S. including California.
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