DayFi Overview
DayFi scales energy by making it liquid, programmable, and decentralized.
What is Daylight Financial ("DayFi")?
DayFi builds capital markets to scale decentralized energy.
DayFi's protocol finances physical distributed energy infrastructure to rapidly scale electricity production and storage to meet the needs of power grids. The infrastructure generates revenues from the sale of electricity to offtakers and the power grid, anchoring the world's first electricity asset.
Why do we need to decentralize energy?
While the Industrial Revolution was powered by coal and fuel oil, the Intelligence Revolution will be powered by electricity. Electricity demand is skyrocketing from the growth of AI and electrification of major industries, with peak demand predicted to double over the next decade. Meanwhile, electricity rates are increasing much faster than inflation, while blackouts are twice as frequent as a decade ago. The traditional, centralized electricity model is at its limits.
Decentralized energy - deploying generation and storage on the edges of power grids, like in homes and businesses - is the cheapest and fastest way to scale new energy capacity today. These distributed energy resources provide value directly to their hosts in the form of cheaper and more reliable energy, but can also provide value to the broader power grid if aggregated together through software as a unified resource.
How does DayFi work?
DayFi's yieldcoin system, GRID/sGRID, finances the buildout of distributed solar and batteries that generate revenues from active grid support. For the first time, investors can access electricity as a new asset class directly; hosts get more reliable and affordable power; and the grid gets verified new energy capacity to support the rapid growth of power demand.
All assets are standardized on DayFi's open data protocol, ensuring the network's energy assets are available for all stakeholders to review in real time. This enables both real time visibility into network operations, as well as programmability for builders to build on top of the protocol's standardized data.
What does DayFi offer DeFi?
DayFi enables access to the asset underpinning the next 100 years of economic growth: electricity. Electricity revenues are tokenized into a synthetic dollar product, offering access to the commodity globally and directly for the first time.
DayFi's yield protocol finances the buildout of decentralized energy. It is comprised of:
GRID, a token extension built on M0's $M stablecoin as a service stack, which is fully collateralized by U.S. Treasuries and cash equivalents. It does not offer yield.
sGRID, the yieldcoin, which earns income from both Treasury yields and energy revenues.
sGRID is NOT a stablecoin; rather, it is a free-floating yieldcoin backed by deposited GRID and revenues from decentralized energy infrastructure.
GRID provides users with deep primary and secondary market liquidity across DeFi and CeFi, thanks to M0's liquidity network. GRID is primarily used as the entry point into the ecosystem. The protocol's revenues are denominated and distributed in GRID.
Through sGRID, for the first time, global investors can access electricity directly as a new asset class, rather than wrapped exposure through utilities or power producers. As an onchain token, it addiitionally benefits from the liquidity and composability that blockchains offer.
What kind of energy assets does DayFi support?
DayFi focuses on distributed energy, specifically combined solar and battery storage. Distributed energy sits "behind the meter" of a building, allowing the building to produce, consume, store, and trade its locally produced electricity. Distributed energy has a significant time and cost arbitrage compared to traditional large-scale power plants. Where power plants can take 5-7 years to permit and build, distributed energy can be operational in weeks. Additionally, distributed energy avoids costly transmission system expansion and interconnection, real estate costs, and energy losses. Distributed energy is a faster and cheaper way to scale energy capacity.
What does DayFi offer hosts?
Hosts deploy distributed energy infrastructure in their homes or buildings.
DayFi offers cheaper and more reliable energy to homeowners than their default utility. With a Daylight Subscription, homeowners get solar and battery storage installed on their home at no upfront cost, and then purchase the electricity the system produces, typically at a rate much lower than their default utility rates. Backup power included with the combined battery.
How does DayFi's protocol function?
Daylight's protocol organizes itself with verifiable data and economic guarantees stored in onchain smart contracts. This provides a transparent and permissionless experience for stakeholders, enabling others to build directly on the network and compose with DayFi's verifiable data, token-based capacity grants, and financing products.
These docs are the protocol's main knowledge repository, with detailed information including the protocol's assets, their collateralization, how they work, eligibility requirements, and more.
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